Look around – no doubt you have friends and co-workers caught between caring for their parents and caring for their own children. Those people are part of what’s come to be called the Sandwich Generation. In fact, the American Association of Retired Persons (AARP) tells us, some 35% of Baby Boomers are responsible for the care of at least one elderly parent.
But what if it’s a grandparent dependent on a grandchild for care? Many young people were raised by their grandparents, some become caregivers because they live closer to the grandparents than other family members, and sometimes, as agingcare.com suggests, it’s simply true that a particular grandchild feels close to the grandparent and has the “caregiver personality”.
If you serve as a grandparent’s caregiver, we at Geyer & Associates salute you. As elder law attorneys, we know what amazing dedication is required when you take on the responsibility of making the best health and financial planning decisions for an older member of your family. At the same time, we want to help you avoid some of the legal and tax “traps” involved in such an arrangement.
- While you may not consider your relationship with Nana a legal matter, it definitely is. For one thing, the Health Insurance Portability and Accountability Act (HIPAA) won’t allow you to obtain needed medical information about her without the proper paperwork in place. An Appointment of Health Care Representative or Medical Power of Attorney with HIPAA provisions ensures that you can receive medical information about Nana and make health care decisions on her behalf if she becomes unable to make those decisions herself.
- It is also important that you have the authority to handle financial transactions should your grandparent need your assistance. A Durable Power of Attorney grants you the authority to handle financial affairs for Nana should it become necessary to do so. Without this document in place, a legal guardianship may be required to give you the authority to handle Nana’s financial affairs should she become unable to handle them herself.
- Having your position as caretaker formalized in a document is important for financial reasons as well. If you are being paid by Grandpa for helping him, but your caretaker status has not been formalized, the money you earn will be considered a gift from him to you, which can negatively impact his tax and estate planning. What’s more, monetary gifts may impact his ability to qualify for Medicaid.
- Even if there is a document in place, you may be considered a household employee of your grandparent under IRS guidelines if you receive wages of more than $1,900 per year for the services you provide. The wages received are income to you, and your grandparent may need to withhold and pay social security and Medicare taxes, pay federal unemployment tax, or both.
The attorneys at Rebecca W. Geyer & Associates understand the complexities and challenges which can arise in a caregiving relationship. We take a compassionate and respectful approach to assisting our clients in addressing these issues. Our goal is to take care of the legal aspects, so you can take care of Grandma or Grandpa!