Personal Care Agreements

If someone in your family requires full time care you may decide that the best person to provide that care is another family member. Even though most family members want to help and feel a sense of duty to care for a loved one, it is a job with heavy time commitments and responsibilities. The person providing care for a loved one may make a significant sacrifice: giving up a job and employment benefits. 


A formal agreement among family members can provide a way to compensate a person providing care if he or she is no longer able to hold other employment.  

Putting the care relationship in writing also protects the person receiving care and the expectations of the rest of the family.


The personal care agreement is a binding contract typically between a family member who agrees to provide caregiver services for a disabled or aging relative and the person receiving care. The personal care agreement is most commonly between an adult child or and his/her parent, but other relatives may be involved, such as an adult grandchild caring for a grandparent.

The agreement clarifies for a family what tasks are expected in return for a stated compensation. It can help avoid family conflicts about who will provide care and how much money will change hands. For this reason, the agreement should be discussed with other family members to resolve any concerns while an agreement is being drafted.

When contracting with a family member, it is wise to treat the agreement as a legal document. If your relative is receiving state supported in-home care, the agreement will show the state where the money is going and for what kind of services. In addition, a caregiver agreement can offset potential confusion among family members concerned about bequests to heirs, and avoid misunderstandings later over the reduction of the amount of money that may be inherited.

Basic Components of a Personal Care Agreement

A personal care agreement has three basic requirements for a person to pay a family member for care: 

  • The agreement must be in writing.
  • The payment must be for care provided in the future (not for services already performed).
  • Compensation for care must be reasonable. This means it should not be more than what would be paid to a third party for the same care in your state or geographic area. Tasks performed should match "reasonable" or "customary" fees typically charged for those services.


Before you begin working with an attorney to draft the agreement you should consider the following:

  • What type of care does the disabled family member need?
  • Which of those tasks will be assigned to the caregiver?
  • What happens if the caregiver no longer wants to provide care?
  • What happens if the disabled family member no longer wants or needs care from the caregiver?
  • Is room and board included in the compensation to the caregiver?
  • When will the caregiver take vacations/ days off and who will do the care tasks on those days?
  • What will happen if the disabled family member moves into a care facility.
  • Who, if anybody, will assist the caregiver with the paperwork/financial side of caring (budget for household items, paperwork for state or county sponsored care)
  • Who will pay for the caregiver’s health benefits if they are not covered by a government program?


How to Discuss Personal Care Agreements within the Family

It is stressful for any family to discuss what happens to the money when a parent becomes ill, and who will serve as the primary caregiver. One method for discussing difficult topics is holding a family meeting. The caregiving team meets in a comfortable place, seated around a table with room to spread out documents under discussion. (Using technology such as Skype, this may also include family members who live far away.) A well-organized meeting can provide the family members with shared support and a better understanding of the decisions to be made.

I can provide you with an agenda for the meeting to enable you to all stay focused on the decisions that need to be made.  I can also attend the meeting if you wish.


How Does This Affect Eligibility for Medicaid/Medi-Cal?

Medicaid (Medi-Cal in California) is a state and federal program that may pay for long-term care costs for people with limited income and assets. To qualify for Medicaid, a person's spending and assets are subject to a "look-back" period of up to five years. This is sometimes called the asset "spend down." If the care receiver needs to enter a facility or apply for other services that Medicaid might pay for, the personal care agreement can show that care payments were a legitimate expense and not an attempt to hide assets by giving cash to family members. The care receiver is paying for the "value" in personal care services.