Are You a Family Caregiver? 4 Reasons Why You Should Keep Financial RecordsAre You a Family Caregiver? 4 Reasons Why You Should Keep Financial Records

Caregiving typically does not happen in one singular moment; instead, it often gradually develops over time. You may begin by helping your loved one with small errands, picking up groceries, mailing bills, driving to doctor appointments. You are acting out of love and make the time to help as much as you can.

At some point, however, you may realize that the role is taking more and more of your time, energy, and, sometimes, finances. It may be time to formalize the arrangement, if only in your own mindset, and begin saving documentation of your work as true caregiver. The reasons for doing so can benefit both you and your loved one.

1. Qualifying for Medicaid

For example, if your care recipient needs to enroll in Medicaid, they must submit work to a five-year “look back” for all of their financial records. If Mom and Dad have been giving you a check each month to buy their groceries – and you have not documented this exchange by saving the receipts – a government entity might suggest that they were giving away their finances in small chunks in order to qualify for Medicaid, which is, of course, forbidden. By saving your receipts and check stubs, you can easily prove how all money given to you was spent and show that it was used to support your loved one.

2. Claiming the Caregiver Tax Credit

In the same way, by collecting evidence of your own finances spent in supporting your care recipient – from gas used in transporting them, to groceries purchased, to prescriptions picked up – you may eventually spend enough of your own money to be able to claim them as a dependent, even if they are not living with you full time. Bring your documentation to a meeting with your CPA when filing taxes, or better yet, contact him or her ahead of time to see if the caregiver tax credit might be a possibility for you. Rather than scrambling to reconstruct what amount of your money was spent in caregiving at the end of the year, file all applicable receipts and records away for easy reference when the time comes.

3. Defending Yourself from Questioning Family Members

Unfortunately, you may also need documentation of how you are helping your loved one for your own protection, if you are ever questioned by other family members or even your loved one.  For example, you may have a fairly informal working system set up with your loved one, where he or she writes you a check to reimburse you for groceries or medications; if this ever comes into question by a well-meaning but suspicious sibling, child, or friend, it’s helpful to have receipts that match up with checks to calmly prove how that money was spent. It’s sad that your actions might be questioned, especially if you have voluntarily become the primary caregiver, but money can bring out the worst in people. Having proof of all transactions helps facilitate calm, factual discourse.

4. Protecting Yourself from Claims of Elder Abuse

In the same way, if your loved one suffers from dementia, there may be a time when he or she actually accuses you of stealing. Fraud against elders is sadly a very real occurrence, and your loved one may suffer from paranoia brought on by the disease. In this case, it’s helpful to be able to calmly show them the evidence of where their money went, using receipts and a carefully maintained checkbook record. If you help by paying bills for your loved one, you might invite them to sit with you while you write out the bills, even allowing them to put them in the envelope and put on the stamp. You can also leverage your loved one’s bank technology – like checking balance over the phone or online – to help reassure them that their money is still where they left it. Patience is key in these conversations, especially when facing memory loss and personality changes associated with Alzheimer’s disease.

While you are continuing to care for your care recipient out of love, at some point you must face the reality that this actually becomes a real job. And just like you would track your finances for a personal business, it can be extremely helpful to save, record, and be transparent in all financial activities, in order to leave no room for questions. In the long run, this will save you time and energy that could be better spent caring for your loved one.

Megan Hammons lives in the Central Texas countryside just outside of Austin, pursuing her love for copywriting after a career in high-tech marketing. She is part of a large, diverse family and enjoys spending time with the multiple generations living in her community.


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