What is a Caregiver Trust? (And Why Your Estate Plan Isn’t Enough)

In this special solo episode of Advice From Your Advocates, host Bob Mannor, a nationally board-certified elder law attorney in Michigan, takes a deep dive into a revolutionary concept in long-term care: Caregiver Trusts.

Most people have an estate plan that dictates what happens after they pass away. But what happens during the years prior, when you need regular assistance with daily living? Simply saying "I want to stay in my home" isn't a strategy; it often leaves adult children overwhelmed, underpaid, or facing family conflict.

In this episode, Bob covers:

• The difference between traditional estate planning and true "life planning".
• How a Caregiver Trust works for both high-net-worth individuals and families utilizing government benefits.
• How to fairly compensate family caregivers without causing sibling rivalry.
• Smart financial strategies to leverage your assets, IRAs, and home equity for long-term care.
• How to relieve the emotional and financial burden on your loved ones before a crisis hits.

Whether you have saved a substantial nest egg or are navigating limited resources, learn how a Caregiver Trust helps you maintain your quality of life on your own terms.

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Host: Attorney Bob Mannor, CELA, CDP

Executive Producer: Savannah Meksto, CDP

Producer: Shalene Gaul

Transcript

Welcome And The Big Idea

SPEAKER_00 0:00

You're listening to Advice from Your Advocates, a show where we provide elder law advice to professionals who work with the elderly and their families. Welcome back to Advice from Your Advocates. I'm Bob Manner. I'm a nationally board certified elder law attorney here in Michigan. And I'm really hoping that you're going to enjoy the next 20 minutes or so. This is going to be a different podcast topic than what we've covered before. And I'm really hoping that you find it interesting. And we're going to cover it from a couple of different standpoints. And so what we're going to be talking about today is this concept of planning in advance for our care. And it's something that we're calling caregiver trusts. So what does that mean? You may not have heard that term before, and that's okay. And I want to talk to you about it. And we're going to kind of go down two paths here. And the two paths, folks that are not in a crisis situation, but want to plan for the future and want to make sure or do their best to plan for better quality of life, better quality of care. And there are the two paths are this. And I'm just going to be really blunt and direct with you on this. One path is for people that have some money, okay? And the reality is, and I think we all accept this about our lives here, is that if you have more money, a lot of times you have more options. But what we see time and time again is even those that have more money sometimes don't do the best planning. You know, we hear about all these celebrities that actually did not do very good estate planning. But we're not actually going to be talking about estate planning so much as we are about life planning, planning for the rest of your life. So we're going to have that conversation about people that have some money, a little extra money, and then we'll still have that conversation about folks that don't have, you know, don't have the that aren't rich. Let's just put it that way, that aren't rich. Because there are folks, and so when we talk about this, and we're going to we're going to call this conversation a conversation about caregiver trust. And I'm going to, I promise I will explain what I mean by that and why we're using that terminology and things like that. But you, I want you to understand first the concept of what we're getting into here, and that is about really thinking ahead before we have a long-term care need.

Why Insurance Misses Long-Term Care

SPEAKER_00 2:34

Now, many of you have heard me talk about this many times, about how you know all of our insurance, Medicare, Blue Cross, all of those structures are primarily set up for acute care, meaning going to the doctor, going to the hospital, maybe some short-term rehab, things like that. But many, many, many of us are going to face a period of time where we need the regular assistance of another person. We need help with our activities of daily living, is the terminology that is used in our industry. And so we're going to need help with care and maybe even paying our bills, maybe even making decisions, maybe even decisions about who's caring for us and where we're living and how we're receiving that care and all of that. And what if, let me throw this out there. What if, since so many of us, statistically at least, are going to face that? What if we plan for that? I know, you know, that doesn't seem like a crazy concept, but in fact, very few people make a real plan. They might have an estate plan, they might have a power of attorney or put their kid's name on an account or whatever, but they don't actually plan for how do we make that better? And I think that this is, we've kind of come to a place now where that is an appropriate conversation for many of us. The idea of actually getting to live that stage of our lives in a way that we're less of a burden to others because we've made some decisions in advance, that we have a better quality of life, that we kind of structure things in a way that we're actually comfortable with the quality and level of care and where we're receiving that care and everything else. I

The Daily Crisis Families Face

SPEAKER_00 4:27

will tell you, nearly every single day, I'm working with families, and they are struggling with how to care for mom and how to care for dad or how to care for their spouse. And they're struggling because we don't have a plan in place. The family doesn't have a plan in place to say, well, you know, a lot of people will say, and this is kind of just something that people throw out there, they'll say, Oh, well, I never want to leave my home. Okay, you know, cool. What's your plan? How are we gonna make that work? Because if you just say that, now you're putting a bigger burden on your kids. Now you're putting a bigger burden on your spouse to say, okay, this person is now maybe has Alzheimer's, maybe is confused a lot, maybe might wander away in the middle of the night because they're confused, maybe gets agitated and is very difficult sometimes. And now you're just telling them, you know, oh, well, you know, I told you my plan. My plan is I want to stay in my home. I want to stay there. Okay, well, that's not really a plan, right? That's like saying, I want to retire as a millionaire. Okay, cool. You know, but do you have a plan for that? Are you just like, okay, well, you know, somebody else will have to figure that out, but I plan to spend like a millionaire when my retirement like you can't just say it, you can't declare it and say, well, I just want to I declare that I'm gonna stay in my home for the rest of my life. That's a pretty good, you know, thought if that's really something that's really important to you, but it doesn't mean anything. In fact, it actually makes it much more difficult on your family if you declare that, but don't give them the resources or don't give them the thought process. And so every single day I am meeting with families that are struggling with this and trying to do what's best, and trying to do what's best for their spouse, trying to do what's best for their parent, and not having guidance or instructions of what specifically we can do. And that's the concept here that we're talking about with regard to the caregiver trust. So I think this is an idea whose time has come, and for a couple of reasons.

Two Planning Paths By Resources

SPEAKER_00 6:42

So I'm gonna go down the path first about people that actually have some money. They saved up some money, you know. When I was growing up, my parents would always talk about save your money for a rainy day. And what's interesting about that, I think that's a pretty common phrase that that folks will say, and especially older folks will say, and my generation and uh and above. But then the issue with that is then when it starts raining, nobody wants to buy the umbrella. In other words, we don't have a plan for that rainy day fund. We just say we gotta save our money for a rainy day, but then we don't have a plan for that rainy day fund. And that's what I'm talking about here is to say, okay, you've done well, you've saved your money, you have a retirement fund. And when I say done well, so because everybody has a different perspective on this, I have a line in the sand, and this will change over time. And if you ask me this, you know, five years ago, or if you ask me this five years from now, I might have a different number. But as of we sit here today in 2026, I think that line in the sand of somebody that has some money is that they have assets totaling about a million dollars. Now, back in the day, a million dollars really meant something, and so a lot of you think, oh, a million dollars isn't much. Some of you think a million dollars is outrageous. I can't even imagine having a million dollars. But but what you have to understand, we're not talking about you having a million dollars in the bank, right? You don't have a million dollars in your savings account. You have a house that might be worth three, four, five hundred thousand dollars. You have an IRA, you know, that might with be worth one, two, three, four hundred thousand dollars. Maybe it's a million-dollar IRA, you know, you have an investments, you have CDs, you have life insurance, you have all these different things. And a lot of people sometimes, when they think about their net worth or how much money they have, they think about what they bring in every month. You know, oh well, I'm working off of twelve hundred dollars a month in Social Security, and that's all I get. Okay, well, are you really? If you if you have a million dollar IRA, you're not really just working off the twelve hundred dollar social security check that you get. Okay. And so we kind of have to have some perspective there. So my perspective is if there's about a million dollars in total assets, including your house, including your IRA, including your life insurance, including your investments, including your CDs, including all of that, you have a little bit more flexibility than other folks. And, you know, are we saying it's that's a line in the sand where if you're a dollar under that, that you don't qualify? And if you're a dollar over, you do qualify. Of course not. You know, it's all relative, right? But let's talk about that. Because that's a substantial amount of money still in 2026. And we maybe should be thinking about that, not just from the standpoint, you know, a lot of people still have this mindset of, oh, well, I want to leave, you know, my house to my kids, I want to do that. I would bet, I would, I would be willing to bet that the majority of your kids that you raised and care for you and you've cared for them, they would rather have you have a good quality of your last few years and not have the burden on them because frankly, when we don't do this, a lot of the burden is on the children to figure this out, or the spouse. And so I would be willing to bet that a lot of them would rather have that you have a quality of care, quality of life, and less burden on them for this stage of life where you need regular assistance of somebody else taking care of you, helping you dress, helping you shower, maybe if you know you become incontinent, if you have memory issues, if we, you know, if you can't prepare meals for yourself, all those types of things. I'd be willing to bet, and I've seen this, I've been doing this for 30 years. I've seen this, right? I've seen this, and I've seen so many families that struggle with it. And it honestly creates conflict in the family because there might be one child that steps up and does all a lot of the work and takes on a lot of the burden, and that creates a conflict between your kids, which is something that everybody tells me they're trying to avoid. So if you got a little bit of money, I think it's probably worth thinking about that and trying to leverage that to say, well, let's create this plan. So I'm 70 years old, I'm 65 years old, I'm, you know, I'm a healthy 80-year-old, you know, whatever it is, and we're not facing a crisis. But you say, you know what, I don't want that burden that Bob just talked about. I don't want that burden. I, first of all, the idea of having a, you know, staying home and having a better quality of life and actually having a plan in place and not being a burden to my children, that's appealing to me. So we say that, number one. But in order to make that actually be a feasible option, we kind of have to think about that

Building A Real Stay-Home Plan

SPEAKER_00 11:43

in advance. And we got to think about a couple things. We got to think about what does that look like? And that is where my office has started to help people with this. So many of you know we have what we call care navigators in our office and social workers in our office. And what we're gonna help with is helping you articulate what that plan looks like. If we say our goal is to stay home, okay, well, that's great, but then what does that look like? Are we going to try to hire a family for that? Would we hire somebody from church? Are we gonna hire a company? And there's, you know, complications in all of those things. If we hire a stranger, are we following the law? Are we following the tax rules? If we hire a family member, is that going to create conflict in the family? I can tell you over the years that I've been doing this, that when one family member starts getting paid for care for their parent, there is some pushback often from the other siblings, the other kids. And often that person's actually getting paid well below minimum wage for the care that they're providing. And where if we had a stranger, they would be paying getting paid $35, $40 an hour. And now we're paying, you know, for the actual hours that this child puts into caring for their parent, maybe we're paying two, three dollars an hour, maybe it's $10 an hour, maybe it's $15 an hour, but it's definitely much lower than the going rate. And if we have some money, and now we're creating a conflict in the family. So the idea is we help you think through these things. We help you kind of set this out so that there's not there's not this animosity, there's not this lack of knowledge and lack of understanding. We actually set it out ahead of time and say, yeah, I would rather have family care for me. Great. Then probably we should compensate them fairly. We shouldn't abuse that family member. Whereas if we're going to pay a stranger, we would pay them three or four times more than we'd pay that family member. That doesn't seem fair to me, especially if you have some money. You know, some of you say, well, a lot of my clients, a lot of me, you know, whatever people that are listening, they say, Well, I don't have those kind of resources. We'll talk about that. But I'm right now I'm talking about the folks that do have some resources. And it's just unfair to expect one person to step up and get paid 25% of what you would pay a stranger for the same service. So the idea though is if we don't set that out ahead of time and not only say, you know, and articulate that we want them, if we're gonna have a family member do it, that we end up having them get paid the you know, fair wages, the going rate for what someone else would get paid, then you know, then we are creating a family conflict. And I rarely, I'm gonna tell you, I rarely see a family member getting paid the same amount that we would pay a stranger because the family, you know, mom and dad didn't set it out that way. They didn't articulate that. And so the person that's getting, you know, providing the care feels a little bit guilty by charging it all. And the other family members are kind of pushing them to say, well, you know, you're why are you getting all this money? Well, they don't have, you know, if they're not the caregivers, they probably don't have any idea of how difficult this is. Or maybe the other possibility is you don't actually want a family member, that you actually would prefer to have a company, that we would have a company that could provide care and would have replacements if somebody's sick, and we don't want to have that burden on the children. Well, let's lay that out too.

How To Pay For Better Care

SPEAKER_00 15:15

Okay, what's the I would guess if you guys are if you're still listening, if you made it this far, I would guess one of the questions you have is okay, but how are we gonna pay for that? Like, where does that come from? Is it come from my bank account? Does it come, do I break those CDs? Does it come from my IRA? Do I take money out of my house in a home equity loan? That is actually part of the conversation that we like to have. To say, not only are we gonna kind of lay out the terms of what you want and what would make life easier for not only you, but for your family, we're also gonna talk about how to leverage the money. And there are you know very interesting ways where we can actually make the best use of the money and sometimes save on taxes, sometimes have it be where we've set it since we set it up in advance, that we can get some kind of multiple on your money because we're using it for care. There are a bunch of programs, not your traditional long-term care insurance, which I think a lot of people are very frustrated by the traditional long-term care insurance where you pay a premium, and if you never use it, you never get that money back, and the premiums are very expensive. There are other options that involve long-term care with financial assets that you can leverage it, that if you meet the medical qualification, sometimes you can get a multiple of the money that you invested in it. And so a big part of this conversation is gonna be part of that too. Is all right, great. We decided we want family members to be providing care, whether it be a grandchild or a child or whatever it is. Or we don't want family, or maybe you found a really nice place and a really nice senior community, and you say, you know what? I have friends over there, and they seem to really like living over there, and they've got just a nice setup and they always you know have activities. They've got, you know, the Elvis impersonator coming by every couple months, and they got a piano player that comes in, and they got, you know, they go to the casino and they just have a fun time. And so maybe that's the strategy they want. Everybody is different about what their wishes are, but to outline those wishes, and we'll help you do this, figure out okay, well, how are we going to pay for that? And that is part of what we call the caregiver trust conversation.

The Caregiver Trust Attorney Network

SPEAKER_00 17:36

So, this caregiver trust conversation, this is a relatively new thing. We really just kind of started talking about it in the last few years. And my friend Julie Steinbacher, who's an elder law attorney, a fantastic elder law attorney and a friend of mine, and we've been friends for years, and uh, she's a thought leader and lawyer out of Pennsylvania. And she actually ended up coming up with the group, we call it the Caregiver Trust Attorney Network. And I'm part of that. I'm the Michigan representative for that group. And we have lawyers throughout the country. So if you've got your sister, brother, parent, whatever that's in a different state, we might be able to connect you with somebody that has the same idea and the same concept. And uh, you know, so far we've been talking about people that have a little bit of money or have a little bit of assets, and so it's you know, I'm not I'm not telling you anything you don't know. It's always easier, it's always easier to have more options when you have a little bit of money.

Planning With Medicaid And Benefits

SPEAKER_00 18:37

So I think we probably have to have this conversation about because some of you might have tuned me out already, and I get that. And if you stuck with me this long, I want to talk to you about the idea that, okay, well, what if there's really not a lot of assets? We can still have this conversation, and so but the truth of it is the more money you have, the more likely you are to design it to be more specific and make have higher demands on that. So if we're we can still have this conversation, we can still design a plan, even if you're healthy to say, well, I want to make sure I'm less of a burden for my family, that I have a plan in place, that I express my wishes, you just can't be quite as demanding and as and quite as designer if you have less money. Because there's probably a good chance that we're gonna be looking at some of the other things that we do in our law office, which would be looking at government benefits, whether that might be veterans' benefits or Medicare benefits or Medicaid benefits, and that puts some restrictions. I think you'd be surprised how many options there are that do involve government benefits. Some people assume that you only get your worst options if it involves government benefits, and that's not true. There are plenty of really nice places that accept Medicaid. Okay. We're not, I don't want you to think that just if we even say the word Medicaid, that you think that that's gonna be bad quality care. That's not the case. But I do know that we have less ability to create a designer life, right? If we're gonna be relying on government benefits, we kind of have to fit into those, you know, into that that that structure. And so we have less options, still good options. And if you want to kind of outline that and kind of lay that out, we can certainly do that too. So the idea of this caregiver trust, it's really kind of different conversations, whether you have some assets and have equity in your house and have an IRA and have some money invested versus you really don't have a lot of that. They're gonna be different conversations, but we can still have the conversation. And that's the whole concept of this caregiver

Beyond Wills Toward Life Planning

SPEAKER_00 20:43

trust. And I just I'm really hoping that this is something that you found interesting because I think this is something we should be talking about. You know, for generations, we've talked about okay, what's gonna happen when I die, and uh what are the taxes gonna be, and do I have to go through probate? And, you know, should I have a will or should I have a trust? And who's gonna be in charge in the event that I have dementia and can't be in charge and can't pay my bills anymore? And those are all very, very important conversations, right? I think it's time to take this to the next level and then have the conversation about okay, we got all that covered, because that's the start. And we got to have that covered. And if you don't, when you're done with this, call us immediately because we can help you with that. If you don't have that stuff or your parents don't have that stuff, that needs to be taken care of. That's just a no-brainer. It's just a non-starter. You have to have that stuff in place. Often we're talking about a power of attorney, a patient advocate, a privacy waiver, probably a trust, probably a will, making sure property transfers properly, all that kind of thing. But let's now take it to the next level and have the conversation about how if if a if we know that the majority of us are gonna face a period of time before we die that we need to be cared for by other people, that someone else is gonna be paying our bills, that we're going to need either care in our home or care in a care facility. Why not start thinking about that and take that burden off your family, but not just take that burden off your family. You can sleep better at night, knowing that you have a plan in place. And it does not involve buying an insurance policy necessarily. A lot of it is just kind of letting us help you think it through and giving some instructions. And that's what the caregiver trust conversation is all about. So I'm excited about this. I hope that this is interesting to you. I hope that this kind of catches on, and more and more people and lawyers and people in the long-term care industry start talking about this to say that yes, of course, we need to plan for you know whether we go to probate or not, of course, we have to plan for taxes, of course we have to plan for, you know, the basic legal documents that we need. That's a non-starter, of course we need that. But if for those that are inclined to plan ahead and be prepared and want to take it to that sort of higher level of need and really be a hero for your family so that they have less of a burden to have to figure all this out if and when the time comes, then I strongly encourage that you let us help you with that conversation. So we're calling that conversation the caregiver trust conversation. And so you can tell I'm excited about this. And I'm hoping that other people start getting excited about this because I really think this is a worthwhile conversation. So you probably have heard some of my other podcasts. I'm often interviewing really amazing guests from all over the world. I've had folks from everywhere that are talking about issues relating to seniors, relating to long-term care, relating to business and taxes, but mostly things involving seniors and people that are getting close to or have completed retirement, and those that are in the industry that serve those folks. So people in the long-term care industry, people that are caregivers, families that are caregivers.

Subscribe And Final Takeaways

SPEAKER_00 24:16

And if you enjoyed this conversation and you want to know when the next podcast comes out, don't forget to subscribe. So it's advice from your advocates, and you can find us anywhere that you can listen to a podcast. We're on all of the podcast stations. So just look for advice from your advocates. And if you hit the subscribe button, then you'll get notices of all of the future uh episodes that come out about every other week. So thanks for joining me today. I hope this was interesting to you, and I'll see you next time.