Private Care Agreements
The following information on care agreements is taken from an out-of-print publication of the BC Law Institute: Before you put your home in the name of another: What – Ifs… .and other important considerations you need to think about – Seniors and Private Care Agreements. ©BC Law Institute.
For more information, see the BC Law Institute’s full study on Private Care Agreements available here.
What Are They?
Private Care agreements often involve a transfer of property (usually the family home) in exchange for a promise of care and support. This can be a promise to care for you for the rest of your life. Sometimes, the senior will put the property in both names (‘joint tenancy’), with the survivor taking full ownership when the other dies. The parties to the agreement may contemplate that the senior and caregiver will live together in the family home.
How They are Attractive
These sorts of informal care arrangements can sound appealing since they can resolve a number of issues. For the older adult they can address the need for support, the desire to stay in the home, and, a desire to provide longer term security for a family member or close friend. For a concerned loved one or friend, this means they can help the older adult within available resources, while preserving the home.
Desire to Age-in-Place
As we said at the beginning, many older adults want to stay in their own home if at all possible, even after truly independent living becomes difficult, unsafe or uncomfortable. As the BC Law Institute has noted:
“Downsizing” may involve moving to a different neighbourhood, or other changes in lifestyle that the senior wishes to avoid. Fear of institutional care – the “nursing home” – is certainly a significant motivation for seniors seeking out private care agreements with family members or friends. Some seniors will be concerned about the costs associated with professional home care, especially where preserving assets for the family is a concern. The senior may prefer a ‘live-in caregiver’ for reasons of companionship and security, although regular home care visits might be objectively sufficient. The senior may also prefer to have a friend or family member providing care and support, rather than a stranger. On the other hand, seniors may not be aware of the available community supports, or have unrealistically negative perceptions about housing alternatives (“supported housing” developments, for example).
How They Can Go Wrong
While a care agreement can sound very attractive to an older adult who wants to stay at home, things can go very wrong. An older adult can lose their home, or be stuck in an unhappy or unhealthy relationship. The BC Law Institute (BCLI) did a study of private care agreements, and they warn:
Unfortunately, most private care agreements are made verbally, without detail, and without legal advice. Relationships change; financial situations change; personalities change; health and care needs change, particularly for older people. These changes can cause serious problems, especially where there is no written agreement.
Why You Should Get A Written Agreement
Seniors may feel uncomfortable about getting their care agreement “in writing;’ perhaps fearing that this might suggest a lack of trust and confidence in the caregiver. Seniors may also be worried about possible expense. However, savings at this point are not worth the risk of losing one’s home.
Why You Should Get Legal Advice
Good advice now can also avoid arguments and litigation later, which may be extremely expensive as well as distressing and damaging to family relationships. Seniors need professional advice about the legal and tax consequences of transferring property. Seniors without significant income or assets (other than the home) are less likely to use lawyers and more likely to make their own (informal) arrangements wherever possible. This is dangerous!
‘What Ifs’ to Consider
BCLI suggests considering the following ‘what ifs’ when contemplating a private care agreement. What if:
- the caregiver pre-deceases the care recipient?
- the caregiver becomes ill, or disabled, and cannot look after the care recipient properly?
- changes occur as the care recipient ages that the caregiver is not really prepared for?(is the caregiver prepared for increased dependency, or personality changes for example?)
- the care recipient (70 at the time of the transfer) lives for another 30 years? (Is the caregiver prepared for that event?)
- the caregiver’s increasing age means they are unable to continue in a caregiving role? (who makes this decision about when the caregiver can no longer provide adequate care, and admission to a facility becomes necessary? Will this be a subjective decision to be made by the caregiver or the senior, or an objective decision to be made by a doctor?)
- the care recipient becomes ill or disabled?
- the care recipient needs to enter a care facility? Who will make this decision? The caregiver? the care recipient? A physician (or physicians)?
- the caregiver or care recipient marries or enters a marriage-like relationship after the agreement is made?
- the caregiver or care recipient, married at the time of transfer, is later divorced or widowed?
- the caregiver loses (what is now) his or her own home? A caregiver’s financial difficulties may result in serious problems for the care recipient – perhaps nowhere to live and no means of support.
- the caregiver needs to relocate? Does the care recipient expect that the promise of care will include remaining in that particular house?
Some other considerations:
- Does the promise to care require the caregiver to perform caregiving services personally? Who would pay for homecare or other professional services – the care recipient or the caregiver?
- What is the level of care expected? Misunderstandings about what the caregiver has promised to do may trigger problems in the relationship, where expectations have not been clearly stated.
- Expected services and level of care should be itemised and valued. Does the promise to provide care include physical caregiving, or is it limited to the provision of food, clothing and lodging?
Dispute Resolution Provision
Misunderstandings about what the caregiver has promised to do may trigger problems in the relationship. It is difficult to anticipate every possibility, and people making a care agreement should insert a provision about dispute resolution. They should agree on a trusted third person who can help to resolve disagreements or problems that may develop in the future.