top of page

The Financial Advantages of a Family Care Agreement

Updated: Jan 10, 2023

“Hey, we’re family and we don’t need a written agreement. This is our own mother we’re talking about!”

Caring is a very important project. Any members of a family who agree to support, in any way, the care of an aging family member will be well-served by an agreement in writing.

A written agreement

  • provides opportunities for everyone to broaden their ideas about care needs,

  • opens possibilities for respite care for the upfront person providing care,

  • fosters cash contributions from family members,

  • invites fairness of contributions despite the differences in circumstances, and

  • generally promotes the core idea that everybody is in a single group with a focused task.

What is a Family Care Agreement?

This agreement can go by many names; a family care contract, a personal care agreement, and elder care contract, and personal services contract, or a family care agreement.

It is a written agreement between a person or persons providing care and the care recipient. Most often, they are between family members, such as an elderly parent and their adult child, however it is not required that the two individuals be related.

Why create a Family Care Agreement?

It allows a family to conserve its combined energies and resources for application to the task at hand – supporting in the best ways possible the long-term care needs of a loved one.

It also opens up every possibility for locating and securing needed help from every available source. This works best with full and open cooperation from everyone involved as a concerted and tightly-focused team. Good research will be needed, along with good information-handling, and good recordkeeping.

A third objective is a financial one. Care agreements are particularly important if an elderly individual might apply for Medicaid. Because Medicaid has an asset limit (for most states this is around $2,000), the Care Agreement verifies that funds were not gifted during the “look back” period, which goes back 5 years. Medicaid could consider any payments to an informal caregiver as a gift, which will violate the look-back rule. This Care Agreement legitimizes the reason for payments.

Goals of the Family Care Agreement are to clearly establish:

  • expectations as to what care tasks are provided and by whom (i.e., bathing, dressing, medication management, house cleaning, transportation, paying bills, etc.),

  • where care will be provided (i.e., in the home of elderly loved one, in home of caregiver, etc.),

  • frequency of care,

  • initial plans for when care needs change,

  • if there is payment for the caregiver from the care recipient or not.

Just the formation of this agreement and reducing it to a writing is highly instructive to all concerned. Each modification will be an opportunity to review the size and scope of each family member’s contribution to care, which can create an effort by some or all to do more. And, if one must withdraw for whatever reason, or no reason, filling the gap will be less likely to prove so disruptive.

What does a Family Care Agreement look like?

The format should be clear and concise. It should lend itself to consider modifications without hesitation as the situation changes, which it most definitely will.

Include the following information:

Services to be Provided and Location

All tasks and duties that are expected of the caregiver need to be included. Examples include light house cleaning, laundry, meal preparation, grocery shopping, and providing transportation to medical appointments and social activities. In addition, it’s important to indicate the location in which services will be provided, such as the senior’s or caregiver’s home.

Frequency of Services

How often (how many days a week) and for how long (how many hours at a time) services are to be provided. The terms can be left somewhat flexible since care needs tend to change over time. For example, the contract might state, “a minimum of 20 hours per week” or “a maximum of 40 hours per week”.

Start Date / Length of Agreement

The date that care will begin. Remember, it must be a future date; the contract cannot be backdated. Also, it is important to include how long the agreement will remain in effect. This may be short term, such as just a few years, or for the life of the individual.

Pay Rate and Frequency of Payment

If appropriate, include the caregiver’s rate of pay. This must be no more than the going rate of a Home Care Aide in the area in which one resides. Also included must be how often the caregiver is paid. For instance, is the caregiver paid weekly, bi-weekly, once a month, or was the payment made in a lump sum?

Modification / Termination Clause

A clause allowing modification when both parties agree that changes should be included. If the agreement is long term, it is highly recommended that the agreement be reviewed, and modified as needed and/or on an annual basis. A clause that allows for termination of the agreement is also recommended.


Ensure both the care recipient and the caregiver sign the contract. Having the document notarized is not a bad idea!

Adding LOVE to your Family Care Agreement.

Talking about agreements or contracts can feel cold. I know caregiving is anything but cold, it's full of emotion!

Having these vital conversations can open an opportunity for a family to have an outpouring of love for one another. Here I turn to my friend, Deb Hallisey, and the warmth she demonstrates in her book Your Caregiver Relationship Contract.

Deb states so eloquently, that “support is the things you do or say that makes the people in your life feel loved, heard, and validated.”

Approaching a conversation with your loved one can happen in a very loving way, that provides an opportunity for your aging loved one to be heard and their desires validated.

Ask questions like

  • “What are you comfortable with me doing to help you?”

  • “What are your boundaries when it comes to personal bathing and dressing?”

  • “What are your wishes pertaining to how long you stay at home?”

Ask them what they do day-to-day and write down the list of tasks that are important to them. As Deb says, “Your elderly parent has done things their way for years.” Be considerate of the changes that providing care for them may cause.

Once you have a list of tasks, start mapping who is responsible for which, how often, and if there are outside solutions or someone to delegate to so care isn’t overwhelming. This worksheet might be helpful for you.

Download PDF • 772KB

Deb has some additional insights as you work through this. Here are ideas she feels are important to keep in mind when co-creating your contract. (We agree!)

  • Don’t “parent your parent”.

  • The words you use and the way you present change matter.

  • The changes you are asking your elderly parent to make are emotional, for you and them.

  • The important term to remember is “co-create”. You and your parent are going to create something together that works for both of you.

© 2023 Elder Care Solutions

Resources For You

We wrote a guide in partnership with I-Ally on having the hard financial conversations with your aging parents and figuring out your own financial needs for your late chapter of life. It's written in easy-to-understand language with concrete advice and worksheets to facilitate your thinking and conversations, this guide makes planning easy!


A caregiver knowledge expert and an advocate for older adults and their families, Debra is a Certified Caregiving Consultant™ and Certified Dementia Practitioner®. She holds an M.A. in Leadership and Supervision and is currently taking additional training to become certified as a Certified Caregiving Educator (CCE) and a Certified Caregiving Facilitator (CCF). She has used the knowledge she has gained to develop The site offers practical advice for caregivers and lessons learned from others on how they handle challenges on issues such as legal, financial, insurance, and caregiving.


Need some extra help with the financial challenges of long-term care?


bottom of page