Care for live: private care agreements between older adults and friends or family members.

• Jurisdiction: Australia
• Author: Hall, Margaret Isabel
• Date: 01 January 2003

1. THE CARE AGREEMENT: ATTRACTIONS AND PITFALLS

   A private care agreement involves a senior's transfer of property (usually the family home) to a friend or family member in exchange for a promise of care and support in the home. Sometimes, the senior will put the property in both names, with the survivor taking full ownership when the other dies. The parties to the agreement usually contemplate that the senior and caregiver will live together in the family home. These arrangements are almost always made orally and without legal advice, or detail as to terms.

   Private care agreements may be attractive to seniors as a means of staying in the family home, but can have very negative consequences for seniors and for caregivers. Seniors may lose their homes where the living relationship breaks down, or continue to live in caregiving relationships that have become unhappy or even abusive. Caregivers are also vulnerable, where a senior's deteriorating health places increased demands on the caregiver far beyond original expectations, for example, or where the transfer is challenged by the estate after the death of the senior (to whom the caregiver had provided years of care).

   Despite the dangers to seniors it is important to emphasise that private care agreements are not inherently a form of financial abuse or exploitation. There are cases of abuse in which seniors have been tricked into conveying property by friends or family members promising care they have no intention of ever providing. These are not care agreements but examples of fraud or theft. Caregivers must not be stereotyped as greedy, and seniors getting involved with care agreements must not be stereotyped as fools or dupes. Most legitimate care agreements seem in fact to be initiated by the senior who- unaware of the 'what ifs' or pitfalls- might see the care agreement as simultaneously attaining a number of important objectives. Staying at home is a priority for many seniors, even after truly independent living becomes difficult, unsafe, or uncomfortable. Helping younger family members and friends is also a priority for many seniors, (2) and the private care agreement appears to provide security for the caregiver while (at the same time) providing for the senior's own needs. While objectively sensible, 'downsizing' may involve moving to a different neighbourhood, or other changes in lifestyle that the senior wishes to avoid. Some seniors will be concerned about the costs associated with professional home care, especially where preserving assets for the family is a concern. A senior may prefer a live in caregiver for reasons of companionship and security, although regular home care visits might be objectively sufficient, and may prefer to have a friend or family member providing care and support (as opposed to a stranger). Certainly, fear of institutional care--the 'nursing home'- is a strong motivation for seniors seeking out private care agreements with family members or friends.

   Private care agreements clearly have the potential to degenerate into abuse, however, even where both parties go in with good intentions. The stresses on caregivers can be intense, especially where needs increase in ways that neither party has foreseen or made provision for. Other unforeseen and unplanned for developments that may cause difficulties include:

   * What if the caregiver pre-deceases the senior?

   * What if the caregiver becomes ill, or otherwise develops problems that prevent him or her from looking after the senior properly?

   * What if the senior (70 at the time of the conveyance) lives for another 30 years? Is the caregiver prepared for that event? What of the caregiver's own increasing age, and ability to continue in a caregiving role?

   * What is the effect if a senior enters a care facility?

   * Who makes the decision about when the caregiver can no longer provide adequate care, and admission to a facility becomes necessary? Will this be a subjective decision to be made by the caregiver or the senior, or an objective decision to be made by a doctor?

   * Does the promise to care require the caregiver to personally perform caregiving services? Who would pay for homecare or other professional services, the senior (who may have few assets, having disposed of the property under the care agreement) or the caregiver?

   * What if the caregiver marries subsequent to the agreement? What if the senior marries? or, what if the senior or caregiver, married at the time of the conveyance, is subsequently divorced, or widowed?

   * A caregiver's financial difficulties may result in serious problems for the senior: what if the caregiver loses what (is now) his or her own home, leaving the senior with no place to live and no means of support?

   * What if the caregiver need to relocate? Does the senior expect that the promise of care will include remaining in the 'family home'?

   * Does the promise to provide care include nursing-type services, or is it limited to the provision of food and lodging?

   * What is the level of care expected? Misunderstandings about what the caregiver has promised to do may trigger problems in the relationship, where expectations have not been clearly stated.

   Most private care agreements in Canada are made informally- orally, without legal advice, and without documentation. Even where the agreement is written down, terms tend to be very general--a promise of 'care for life'. In many cases, especially where parents and children are involved, the senior may feel that asking for documentation or seeking legal advice indicates suspicion or a lack of confidence, and may be reluctant to do so for that reason. Informality makes it much less likely, however, that the parties will have discussed and made provision for the kinds of 'what ifs' listed above. Where expectations have not been discussed, and agreed upon, it becomes much more likely that the agreement will fail to work out for the mutual benefit of the parties. A formal written agreement or contract documents the true nature of the exchange as a bargain- not a gift- providing important protection for the senior in the event that the arrangement does not worked out as hoped for, and so makes it more likely that the senior will receive what he or she 'paid' for. Itemising and valuing services can also protect the caregiver from subsequent challenge that the transfer was unconscionable or made on the basis of undue influence.

   Informality can also cause significant problems of legal interpretation. Most notably, the transaction may look like a gift, with the 'taker' obligated to give nothing in return, a very unfair outcome for the senior. While the senior may be able to prove the existence of a bargain or agreement in court, the demands of the court process- in terms of time, expense, and personal conflict- may be beyond the resources of many seniors. Moreover, to the senior who has 'given away her house' which now 'belongs' to someone else, it is probably not intuitively apparent that anything can be done about it posing a significant barrier to legal access.

   The most careful and detailed of written documents may not be able to overcome all of the pitfalls latent in the private care agreement, however. Upfront payment creates a disincentive to provide caregiving that is consistent in quality, for example. Where this disincentive is combined with caregiver fatigue, care of the senior may become inadequate. The parties may also find that living together in a caregiving situation creates strains in their relationship that neither could have predicted; the consequent relationship problems may make living under the care agreement impossible, and can be the cause of lasting damage to family harmony.

2. INTERPRETING INFORMAL AGREEMENTS: EXAMPLES FROM THE CASE LAW

   Where the care agreement consists of a broad, oral promise to 'care for life' it is difficult to determine the terms of the agreement and, therefore, the circumstances in which those terms will have been breached. Is the agreement 'breached' if the senior enters a care facility at some point, for example? What is the standard of care required under the agreement?

   This was the contention of the plaintiffs (the estate) in the case of Simpson v Simpson. (3) The written agreement in that case stipulated that Mrs Simpson's son and daughter-in-law would pay rent to Mrs Simpson and other expenses associated with the property, and that Mrs Simpson would be provided with an apartment on the property. The son also made a verbal promise to 'care for' Mrs Simpson. In exchange, Mrs Simpson transferred ownership of her home to the younger couple. After Mrs Simpson's death, her other children sought to have her conveyance set aside on a number of grounds, including breach of contract, alleging that the promise to care had been breached when Mrs Simpson moved into a care facility. The plaintiffs also alleged that Mrs Simpson's inadequate living conditions prior to being moved constituted a breach of the promise to 'care.' The court rejected both arguments:

   There is no doubt that the condition of the suite, and, indeed, the condition of Mrs Simpson, was not always impeccable in the years after 1987. However, that does not mean that Lloyd and Marilyn [the defendants] were not living up to their contractual obligations ... Not content to pursue these groundless allegations the plaintiffs at trial alleged that Mrs Simpson's admission to a nursing home was contrary to the agreement that Mrs. Simpson could live in the apartment for life. Common sense dictates that the time may well come in anyone's life when institutional life is a practical necessity. Short of outfitting the suite as a quasi-hospital...