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Caregiving and Estate Planning: What You Need to Know

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Caregiving and Estate Planning: What You Need to Know

Caregiving can be a profoundly personal journey filled with compassion and responsibility. It can come with a deep sense of satisfaction and meaning alongside feelings of sadness or pain. It might be as complicated as providing daily personal care from infancy through adulthood or as deceptively simple as offering intermittent guidance and support to an elderly relative.

two women sitting in backyard

At the end of the day, a caregiver’s role is to provide others with the physical and emotional support they need. To do it well? That calls for courage, vulnerability, tough conversations and at least a few sleepless nights.

Yet there are some serious financial considerations, too. Frankly, we probably don’t talk about those aspects nearly enough, especially in light of all that caregivers do.

To begin closing that gap, let’s explore the intersection of caregiving and estate planning — and examine how being proactive might help provide better peace of mind for everyone involved.

Caregiving: A rising financial issue for families

With an aging population and rising health care costs demanding more of caregivers than ever, it’s no surprise that the Centers for Disease Control and Prevention has identified caregiving as a public health issue1 that directly impacts social, emotional and physical well-being.

Because most people who provide care to other family members (e.g., elders, children, people with disabilities) do so in a voluntary capacity, they seldom receive any compensation. In fact, caregivers may choose or feel compelled to curtail their own careers and retirement plans by taking extended leave or quitting jobs completely. This can have major financial consequences across their lifespans, reducing their lifetime net earnings and curtailing the funds they have to support their golden years.

At the same time, people benefiting from familial care — including children and adults with disabilities and elders — must often rely upon direct and indirect support from their families to have their needs met, even if they benefit from governmental aid.

Fortunately, in families where money is available to offset some of these costs for caregivers and people in need of care, well-structured and comprehensive estate plans may help.

Caregiving and estate planning: Who may benefit?

It can be helpful to think of an estate plan as a roadmap for the management and distribution of assets. Yet very few people have a formal estate plan in place.

When significant care is needed, however, the absence of a formal plan can create complications or lead to missed opportunities.

Here’s how that might look within the context of caregiving:

  • If you are a caregiver, the lack of an estate plan may mean there is no formal plan for what happens to those you care for after you’re gone. This could leave them vulnerable to less-than-adequate care or time in facilities that don’t meet your personal standards.
  • If you rely upon a family member to provide long-term care and support to yourself or a loved one, you may miss an opportunity to help shore up their long-term financial well-being through estate planning. Plus, given the unique financial considerations2 that women — who do tend to bear the brunt of caregiving work — encounter across their lifetimes, it’s also kind to think what the future might hold for your family’s female caregivers specifically.

In other words, with a well-documented estate plan addressing current and future caregiving situations in your family, everyone may be better positioned to address who and what might need tending far down the road.

What might advanced caregiving support involve?

Typically, a thorough estate plan consists of several component parts, or estate planning essentials.

Naturally, a will is, for most people, among the first documents someone might consider as foundational. And then there is the paperwork that many caregivers know all too well from time spent in hospital settings: power of attorney and medical power of attorney documents as well as end-of-life care instructions.

Depending upon the caregiving situation in your family, there may be other components to a caregiving-centered estate plan, such as:

  • A trust to help manage and distribute funds on your behalf when you are no longer able to, providing for a loved one’s continued care. Trusts may allow caregivers to protect and manage assets according to their loved one’s wishes, safeguarding them from mismanagement, exploitation or depletion.

» Tip: With the help of an attorney to create it and a trust administrator to help manage it, a trust can also address what you wish to happen if a recipient were to pass away first or if, having survived you, still left considerable funds, real estate or expensive personal items untouched. Naming secondary beneficiaries, including charities,3 in the document can help resolve this matter years or decades in advance.

  • Beneficiary designations on life insurance policies, retirement accounts and bank accounts to help ensure assets go to the right hands. Be sure to include contingent (or secondary) beneficiaries so if the primary beneficiary is deceased, the funds pass to someone else.
  • Guardianship for dependent children or adults with disabilities who require ongoing support. This can be established with the help of an attorney, ensuring the continued care and well-being of their loved ones when they are no longer able to fulfill that role.

» Tip: With a rapidly aging population, many middle-aged people find themselves taking on a long-term caregiving role for their elders, people who may not be of sound mind. But what would happen if, as a caregiver, you were no longer around? Failing to establish clear estate plans to cover their care could lead to decisions being made with which you do not agree.

Proactive steps to safeguard yourself as a caregiver

Candidly, when we talk about estate plans, we’re talking about how finances will be managed. And that can be an extremely sensitive subject in some situations, one warranting clear communication, careful planning and perhaps professional support to avoid even the slightest whiff of inappropriate behavior or undue influence.

No, it’s not fun to talk about, but, yes, it’s worth considering if only to avoid trouble down the road. For instance, when funds or assets are inherited by a caregiver or left primarily to one beneficiary in the context of significant wealth, it may be viewed with suspicion or even legally challenged.

Thus, below are a few precautions to keep in mind when exploring the intersection of caregiving and estate plans, with an intentional emphasis on eldercare as it is the most common scenario family caregivers experience.

1. Plan early and communicate.

Start thinking about estate planning before a crisis occurs. This is especially true if you anticipate that you’ll be providing care to an elder presently of sound mind or if you’re the one anticipating the need for care.

Engage in discussions with your loved ones about everyone’s wishes and intentions. Encourage the creation of powers of attorney for health care and finances. (Yes, for everyone involved because it’s wise to have these documents in place.) Although these conversations can be challenging, they can help ensure everyone is on the same page.

2. Seek professional guidance.

Estate planning can be complex, especially if assets are large. Consider working with experienced professionals — attorneys, CPAs, financial advisors and trust administrators.

Through their networks and resources, they may also help you navigate the intricacies of Medicare, Medicaid and guardianship arrangements, which could contribute toward ensuring that your family member’s needs are met in your lifetime (and beyond).

3. Avoid undue influence — and report evidence of it.

Elder abuse and financial exploitation are understandably legitimate concerns. When a caregiver assists loved ones in meeting with attorneys, tax professionals or financial advisors, ensure that the involvement is transparent, and no coercion is in play. Ideally, elders of sound mind should communicate independently with the law firm to set up appointments and meet with the attorney without any beneficiaries present.

See something in someone else’s behavior that raises a red flag? Say something. Caregivers can be instrumental in putting an end to inappropriate behavior.

4. Document everything.

A caregiver may manage various aspects of a loved one’s life, from updating accounts to booking appointments. It’s important to keep detailed records of activities. If there are no funds available to secure an accountant, consider enlisting a trustworthy party to help double check your notes.

This documentation can be crucial if a disputed will or trust ever heads to court. It can also demonstrate that the caregiver is acting in the best interests of the care recipient without exerting undue influence.

5. Preserve independence.

When tending to an elder, do your best to preserve your loved one’s independence and decision-making for as long and as much as possible. Even as a primary caregiver, try to respect their choices and preferences. Encourage them to express their wishes to neutral third parties so it doesn’t appear that decisions are made against their will.

Again, do keep an eye out for fraud or elder abuse (physical, emotional or fiscal) and address it with the appropriate authorities when warranted.

The takeaway

With estate planning, caregivers can feel more confident about the future of those for whom they provide care as well as themselves. Keep in mind, too, that estate planning is not a one-time event. It’s important to regularly review and update estate plans to reflect changes in the family, finances and tax laws.

To learn more about how estate planning can help you develop a customized strategy to protect and provide for those you care about, contact RBFCU Trust Services today.

Last updated March 2024.

Information in this article is general in nature and for your consideration, not as financial advice. Please contact your own financial professionals regarding your specific needs before taking any action based upon this information.

RBFCU Trust Services is a division of RBFCU Investments Group LLC. RBFCU Investments Group LLC is a wholly-owned subsidiary of RBFCU Services LLC. RBFCU Services LLC is affiliated with Randolph-Brooks Federal Credit Union (RBFCU). Trust services available through Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency.

Trust and Investment products are not federally insured, are not obligations of or guaranteed by the credit union or any affiliated entity and involve investment risks, including the possible loss of principal.

This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant.


The following sources were last accessed March 2024.

1“Caregiving for Family and Friends — A Public Health Issue.”, 7 Aug. 2019,

2“4 Financial Considerations for Women.”,

3“Charitable Giving: Creating Your Personal Philanthropy Strategy.”,