Recently, I attended a national convention for financial planners. At the conference, I attended a session on Alzheimer’s disease led by a young financial planner. After the presentation ended, another financial planner in the audience stood up and asked a question. She explained that she had a client who had a caregiver. The caregiver lived in the client’s home and appeared to be a relatively well-to-do woman?she had nice jewelry and clothes, and her hair and nails were always done.

One day, the financial planner mentioned to the caregiver that she was supposed to be paying taxes on the money she received for caring for the client. The caregiver, perhaps not surprisingly, objected to that. To be specific, the caregiver did not want the elderly woman to issue her a 1099 for her services because she didn’t want to pay taxes on those earnings. However, according to the IRS, the elderly woman was required to issue the 1099. Nonetheless, the caregiver argued that she’d never paid these taxes before, so why should she start doing it now?

Now, the financial planner was somewhat befuddled by the caregiver’s response. She wasn’t a tax expert, and she wasn’t sure how to respond when the caregiver said things like, “Well, I don’t want it messing up my Social Security.”

Essentially, the caregiver was saying that she wanted to be paid under the table for her services. The financial planner then turned to this speaker at a national convention to ask if she should be concerned about the caregiver and whether there was anything she should do about her. The speaker was an intelligent young man, but this wasn’t his area of expertise, and he was caught off guard by the question. So I spoke up from the back of the room and said, “This caregiver is gross. She doesn’t want to pay her taxes. What else might she also be neglecting to do, including properly care for the client? You should get rid of her.”

Unfortunately, situations like the one above are all too common. People let caregivers into their lives and then don’t know when (or how) to get rid of them. In some situations, people become fearful of the caregiver. In other cases, a client might become attached to caregiver, even if he is dysfunctional or abusive. In those situations, a client could be afraid to let a caregiver go because of a fear of being left alone or of being unable to find someone to replace the caregiver. The client may even fear that another caregiver will be just like the first.

One way to avoid getting involved with a dishonest, exploitative or abusive caregiver is to check them out before a relationship begins. If there are signs (such as wanting to be paid under the table) that the caregiver just wants to line their pockets, walk away. In the story above, the client and the planner knew nothing about the caregiver. They hadn’t done any kind of background investigation on this woman, even though she was being allowed to live in the client’s home.

When choosing caregivers for your own loved ones, you must be vigilant. If a caregiver is failing to follow basic laws (such as paying taxes), there’s a good chance that there are other things that they are failing to do. Remember, don’t be afraid of the caregiver. Get rid of bad people, and get good people in there to care for your mother, father, or other loved one. There are plenty of good caregivers out there. The problem is, many people are willing to put up with unqualified or dishonest caregivers because they don’t realize there are other options. We need to expect?and demand?more from those who care for our loved ones.  

Click here to listen to Chris Cooper’s radio show on Long Term Care and Financial Planning for Seniors.
 
Chris Cooper, CFP®, is the owner of ElderCare Advocates, Inc. a geriatric care management and long-term-care consulting firm. He is also the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm that works with small business owner, persons preparing to retire, and the very elderly. Chris is a regular contributor to eCareDiary.com and was recently interviewed by eCareDiary’s co-founder, Susan Baida, regarding Empowering Family Caregivers. Chris has also on has appeared on CBS's Early Show, NBC's Today Show, and is a regularly featured guest on CNBC's Power Lunch. He is frequently quoted in The Wall Street Journal, USA Today, The New York Times, Kiplinger's Personal Finance, Money, and SmartMoney.

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