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So, I have skimmed many questions on this topic. My 93 y o dad came to live with me in Sept and he's mostly pretty easy (can shower, toilet, walk, and feed himself). He cannot cook or clean for himself and I need to make sure he gets in and out of the shower safely. We did hire a helper to come in to give showers and to give us a break to go run errands (almost always related to dad-stuff) But Dad is taking up our guestroom, eating our food, and consuming our time with many doctors appointments and other admin kind of issues (like DMV). Also we are busy keeping him doing interesting things (puzzles, games ,walks etc).


Before he lived with my brother for $500/month which included room, food and doctors appointments but mostly they left him to his own devices and he watched tV and didn't get any exercise. They worked and did their best but he pretty much vegetated and lost a lot of stamina and brainpower. We have a much nicer house and our expenses are ,of course , higher. Plus he also likes having us home (they work) and we are his captive audience.


I paid myself the $500 same as my brother but I'm feeling like that's not enough.. just a room in our town would cost $750, and that's not including food.. much less all the "admin" of doctors appointments etc.


On the other hand, I don't NEED the money and I really don't want to report income. Is it really income if he's eating our food, using our gas for trips in the car, using utilities? Do I need to report this income on my taxes? I have to fill out a form for the VA and if I call this amount (whatever amount it is) "rent", is that reportable as rental income on a tax return? If I don't call it "rent", what do I call it?


The deal is that I'm keeping him until Covid is over and assisted living is more open to visitors. Then, still, I'll be the only one in town, so I will be still doing doctors etc.


If I give myself a raise (I'm power of attorney), my brother will resent it. I"m sure he never reported any income on it... and frankly, I agree, it's really just sharing expenses.


If I count up all the monthly expenses for this house and divide it by 3, it's closer to $1,000/month. If I only count the increase in our monthly expenses (additional food etc) since dad came, it's probably closer to $500.


I'm sure that dad's care will require more and more as he is declining so I'm looking for a way to recoup our costs at least... and whatever more I can reasonably get without having to declare the income... is that even possible to do?


Most of what people do discuss here is what to pay the sibling who is the caretaker and that's another whole question. I'm assuming that is often in the parents home and they are getting room and board... so this is kind of an opposite situation I think?


Any ideas for me?

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If I were you I'd have a written rental agreement and then a separate care agreement and have him write you an actual check each month. This will be a very important paper trail should he ever need to apply for Medicaid, which in some states has a 5-yr "lookback" period. Many people believe they or their parents have saved up enough funds for retirement but the bulk of their money is spent in the last 18 months of their lives (and no one can predict when that will occur). So, you will need to report it as income so you don't shoot yourself and your Dad in the foot should he need Medicaid. It will be far more costly if your Dad needed Medicaid and couldn't qualify and you had to support him and pay for his facility care out of pocket yourself. I personally think it is worthwhile to invest in a 1- or 2-hour consult with an elder law attorney who knows estate planning and is familiar with Medicaid in your state. Laws differ from state to state. Maybe a lawyer can suggest an arrangement that doesn't make you an employee of your Dad (because of withholding taxes, etc.) if he pays you for "care".

I purchased my mom's house. She is 91 and we have crazy longevity in her family (she has 3 older sisters still living and her brothers all lived well into their 90s with never visiting a doctor) so I think she will run out of money for her care at some point. We chose to do this because the lookback in my state is 5-years. I charge her a nominal amount of rent that covers utilities and property taxes so she pays from an invoice every month. Every money transaction has a paper trail. I applied for Medicaid for my MIL, so I know what they look for.

Mine is only a suggestion and by no means "professional" advice. If your Dad has plenty of financial resources, then it's up to you how you work it out.
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Keep all receipts spent on dad’s care. Show your dad and brother how much is actually being spent.

Have a family discussion on how to settle this matter. Do this soon so resentful feelings don’t crop up.

It is a matter of what is fair. Do what is in the best interest for all of you. Make sure it is all on the up and up.

Don’t put your father in an awkward position of having to explain his finances if Medicaid is needed down the road.

No one can predict the future. Best to be safe than sorry.

All the best to you and your family.
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So, Medicaid is NEVER going to be an issue for my dad. I think he could live to 115-120 before he would run that low on cash. Frankly, his assets have grown primarily because he feels he only needs to pay for food and utilities which is how the $500 came about. However, he has been declared unable to make decisions and as POA, I can decide... and if it was still my brother taking care of him, I would give them a raise. Ironically, my brother stands to inherit more than I will because dad feels he needs the money (and he does).. so before I felt he was earning "sweat equity" anyway. Now I'm doing it all and will end up with the same as my step sibs... and that's OK, I just don't feel I should be out of pocket as well as inconvenienced. I don't want to get paid for care which is definitely 1099 income... I'll just have dad pay for caregivers who come in. I don't want to call it rent because then I have to declare that too. I just want to have a "roommate agreement" of sorts where he pays me 1/3 of food, utilities, home insurance, home taxes?, cleaning lady, maybe home maintenance. Maybe 1/3 of car expenses like gas and insurance. Is this something that is "done" out there in the world? It's more complicated to compute, of course. Or something similar? I feel bad not telling dad what I'm up to but he can't understand it anyway... my sibs will absolutely accuse me of taking advantage... but then they will do that each and every single time and I really don't give a da*n. As I said, my bro's getting more in the end anyway. And my sister is a rich B-*-T-C-H so there is no pleasing her. I just don't want to have an IRS issue or a VA issue because I filled out the forms in this fashion to get some help benefits (assuming he even qualifies, it's confusing).
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I see that you are quite the planner (and I relate to that) but just so that you're aware...eventually you may not want your dad living in your house if his behaviors become awful -- which can happen with dementia (just read some of the posts under the Burnout topic). Formerly nice people become unbelievably mean, all day long, doing dangerous things, keeping weird sleeping hours, moaning, screaming and developing strange habits like shadowing, constant spitting (inside the home), unsanitary bathroom issues, more than one can never imagine of their beloved parent. Or he may do none of those things. Should he require care 24/7 (and any of a medical nature) this will eventually exceed the cost of even the nicest facility. Managing that much care will take up lots of your day. Just stay mentally flexible and realize that dementia and decline will be constantly changing his care needs.
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marydys Oct 2020
Oh I know! Every day the caregiver comes I plan tours of the local assisted living and memory care places. This is TEMPORARY until these places open up their visiting restrictions. When they allow visitors and they allow me to take him home for dinners or holidays, then he's moving in and I get more freedom again!
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marydys, you'd be surprised how quickly Dad's rainy day funds can empty out especially if it is storming out there [expenses].

My Dad [95] had 3 shifts of caregivers per day after my Mom had passed as he was a fall risk. That amounted to $20k per month, thus $240k per year. And if Dad had lived another 5 years with that arrangement, that would be over a million dollars.

My Dad wanted to cut expenses so we talked about senior living. I arranged a tour of a local place and Dad loved it. Monthly rent for his 2 bedroom apartment was around $5k per month [varies from area to area], which allowed him to cut cost and still afford to bring his favorite day time caregiver. Dad was starting to have memory issues so having the same smiling face wake him up each weekday morning gave him a routine.

My Dad enjoyed being around people closer to his age group, and he enjoyed the dinners in the restaurant at the complex. His caregiver made him breakfast and lunch. That $5k rent included some utilities plus once a week housekeeping and linen service, and one daily meal in the restaurant. Plus there was always a nurse on-duty 24 hours a day. His caregiver did his personal laundry.

So it's something to think about. And it is so much easier to have my Dad go to senior living while he was still able to learn names/faces and find his way around the complex. Eventually he moved to Assisted Living/Memory Care at the same complex so that worked out well. Yep, he brought along is favorite caregiver :)
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marydys Oct 2020
Yep, I agree, I want to get him in while he still has some wits about him so the transition would be easier... just waiting until these places will allow visitors and in the meantime doing my tours. I plan to have him to some respite stays for a couple weeks at one and HOPE he will love it. My issue is whether assisted livng apartment is the right thing for him. He's still social but wouldn't be able to keep track of a schedule of events or even meal time. And some of these places are so big, I'm not sure he could negotiate the hallways to the dining room. On the other hand, all the memory care places I found the people can barely talk and he would be extremely unhappy. I like the board and care homes for 10 and under people, but its the same thing in each one I've visited (5 now)... all the residents are not mobile, not talking.. some are bedridden. If he is surrounded by that, I feel like he'll be there that much quicker. When he's here with me, I work constantly to keep him doing something besides watching tv. It's a lot of work. I'm also looking for adult day care but, again, I'm worried about Covid so will move cautiously. I figure he's here until next summer at a minimum.

As far as running out of funds, he sold his home and, at 100K a year, he could live 15 more years (he's 93!)... and I would LOVE it if he spent every last sent and my sibs and I got nothing!!
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If there are 3 people living in the house he should pay for 1/3 of the expenses that includes mortgage, utilities, food and charge him for the transportation to appointments and errands you run for him. (check what the government allows for mileage expenses) And a caregiver can make about $20.00 per hour (that is what I paid the people I hired but it has been a while, and this is private pay a caregiver from an agency does not make that much since the agency takes a portion.
Keep track of everything.
Draw up a "Caregiver Contract" and detail what care you are providing. I would make the contract a 6 month one and review it then if you think you are doing more than than you were the first month then increase your "pay"
If funds run out you can begin application process for Medicaid.
I also suggest that you talk with an Elder Care Attorney to determine if there are other things you should be doing.
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According to IRS research I did.. don't call it rent... call it shared roommate expenses. I think I'll have him pay 1 /3 of food and utilities and some portion of the property taxes, home owners fees and house cleaner expense (based on the square footage of his bedroom. And then a per mileage amount for doctors offices and trips. It sounds like a pain in the neck but probably worth doing for both the SIBS and the VA's purposes because they want itemized amount. If I call it "rent" then it's taxable to me as rental income. I don't plan to get paid caretaker expenses but will just keep hiring that out until the day comes that he can move out. And of course he'll pay for all the additional things himself (or reimburse us if we buy it for him)... like clothing etc. I'll do an estimate of the $500 and when the bills come in, then true it up with an additional payment. Good thing I'm an accountant because this is a huge amount of work... probably unnecessary for anyone but the VA. The VA does have a caregiver allotment for dementia patients that he might be eligible for but it depends on his income and expenses... and only certain expenses apply.. for example, not the housekeeper and not the homeowners fees and maybe not the mileage. Hopefully he'll actually get some help out of all this work! Once he is in assisted living it gets much easier to fill out the forms. So thank you all very much for your ideas.
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