How to Avoid the Financial Pitfalls of Being a Caregiver

Common Caregiver Pitfalls

It takes a special type of heart and selflessness to be a caregiver for a loved one but sometimes the best intentions can backfire. Most often it’s going to be the adult child or spouse that will act as the caregiver. But there may be other interested parties in the circumstances, such as siblings or stepchildren, with different motivations-nefarious or not.

One of the pitfalls I see with caregivers is the commingling of assets. It’s common for the caregiver to pay for groceries, or pay out-of-pocket for certain expenses for a loved one with the expectation that it will all balance out in the end. However, when it’s time to reconcile, everyone may not be on the same page and the caregiver may be out of this money.

We often see caregivers give up jobs or careers to care for a loved one. This may be an active decision made by the caregiver because of the belief that the loved one will take care of them. However, when there’s not clear communication to this regard, the caregiver can find themselves in a financially difficult situation if the family member being cared for as had a change of heart, or if other beneficiaries of the potential estate dispute the value of the services, or any renumeration at all.

Sometimes taking on the responsibility as a caregiver may bestow upon the caregiver a heightened standard. Are the investments be managed properly? Is the cash flow being tracked? Are the proper safeguards in place in the event of a fraud/theft? If the caregiver hasn’t put these things in place, will the caregiver face liability? Often the answer is no, but despite not facing potential legal liability there may still be a negative impact on relationships with other family members.

Leave a Reply

Your email address will not be published. Required fields are marked *