Caring for an aging family member is a labor of love. It also can be a way to earn money and to bring clarity to the finances of your family's most senior generation.

Some families appoint one member to be the designated caregiver. It can be a win-win arrangement: The caregiver has steady, though usually modestly compensated, employment. The aging family member receives the care they need, and the extended family can rest easy knowing the caregiver is someone they know and trust.

Is entering into a caregiver's agreement right for you or someone in your family?

If your family decides to appoint a caregiver, it is important to draw up a formal agreement. Such agreements establish the scope of the services expected and the source and amount of compensation for the caregiver. (Most often, this money comes from the person being cared for.)

While there is usually only one person responsible for day-to-day care, each member of the immediate family must agree on that person's responsibilities. The process is generally straightforward: A relative provides for the elder’s day-to day needs, and the family, with the help of an elder law attorney, determines how much of the elder’s assets will be used to pay that caregiver.

“There are situations where one sibling expects another to take care of an elderly parent because they live outside of the state or because they don’t have time to do it,” says John Roberts, an elder law attorney from Longmeadow, Mass. “An agreement like this allows the family to determine who will take care of an elderly parent and gives that caretaker an income while they do it.”

Keep Money Matters Transparent
Having a caregiver agreement can also make it easier to track your senior loved one’s finances. Often, without an agreement, the finances of the loved one and those of the caregiver get muddled together and it becomes difficult to track who paid for what.

“These agreements make care giving more transparent,” says Linda Fodrini-Johnson, president-elect of the National Association of Geriatric Care Managers. “Just writing down how your loved one’s money will be used, by whom, for what, and specifying how much the caregiver will be paid will reduce the risk of arguments among family members.”

Making the Agreement
There are six steps to putting a successful plan together:

1. Find an elder law attorney. An elder care attorney can walk you through the process of building a caregiver agreement, especially when it comes to figuring out who is best suited to be the caregiver, how to allocate your loved one’s assets and how to establish the rate at which the caregiver is to be paid. You can start your search on the National Elder Law Foundation’s Web site.

2. Start looking for geriatric care managers. Some older adults are not accustomed to needing help, and some caretakers have a difficult time understanding how they can assist. A geriatric care manager can act as the bridge between the two, easing the elder into a slightly less independent lifestyle and explaining how the caregiver can preserve the elder’s dignity while taking care of them. You can search for a local care manager at the National Association of Professional Geriatric Care Managers Web site.

3. Find out the going rate for home care assistants. According to the Texas Department of Insurance, the cost of a part-time home care assistant can cost as much as $32 per day, or $16,000 per year. Your loved one may not have enough to cover a caregiver at this rate, but that doesn’t mean that he or she should work for free either. Caregiver should do some research and find out how much they need to earn in order to make the sacrifice worthwhile.

4. Communicate with family members. Spouses, children and siblings all have a stake in the elder’s long-term care. Sit down together to discuss your goals and to determine how the agreement will impact your lives. 

5. Create a schedule. Caregivers aren’t workhorses, but your elder may need around-the-clock care. A caregiver may work a couple days a week, for example, and a geriatric care manager may come in at other times. Have the care manager train your entire family so that everyone can pitch in when necessary.

6. Be flexible. The caregiver agreement is not written in stone. If something is not working for you, then amend the agreement with your family and create something new everyone can live with.

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