Seniors Beware of Care For Life Agreements

Senioirs beware care for life

Seniors often fall victim to the best of intentioned Care For Life Agreements with a child, that often turn disastrous.

I was recently retained by a senior who advanced over $400,000.00 to his only son and his wife. He did so on the understanding they would purchase a home in which they all would live and the couple would care for the senior for the rest of his life. The house was purchased in the couple’s name. The senior lived downstairs in the home until four years later when his son met an untimely death. Title to the house was then transferred to the widow as surviving joint tenant whereupon she immediately evicted her father-in-law. The end result is the senior is now penniless and the widow has pocketed the monies and departed. In only four short years, my client went from having control of his life and finances to being a destitute and broken person.

This devastating fact pattern is unfortunately happening all too frequently. Unquestionably many lawyers and estate practitioners will be consulted with respect to these types of failed agreements in the coming years. As our population continues to age, more of these informal kinds of family arrangements will certainly be made. The typical scenario will involve a senior transferring property in exchange for a promise of lifetime care. Most often the property will be the family home which is transferred outright or into joint tenancy with the caregiver. Such arrangements typically will be made between a parent and one of their adult children or with another relative or trusted friend. Caregiver kids range form those that have never left home to the black sheep who returns after a long absence to take care of elderly parent and winds up with the house.

Often these arrangements are entered with the best of intentions, however the parties are naïve as to the careful thought and discussion required. Such agreements are usually oral and accordingly vague. They are likely done without any legal advice and the formalization of such agreements is usually almost non-existent.

From the senior’s perspective, the care agreement is perceived to be a simple solution to allow him or her to stay in the home until death. Many seniors may fear finishing their days, isolated, in a nursing home or other institution. From their perspective transferring the property to the caregiver, in return for continued care, may seem an ideal solution. They often look upon their prospective caregiver through “rose coloured glasses” and naively look forward to a harmonious life surrounded by loving family or friends who are grateful for the substantial financial benefit bestowed upon them.

There is often an incentive for both sides to enter such an arrangement. Many seniors of modest means purchased homes years ago. Those homes have now greatly appreciated in value. Potential caregivers are often relative newcomers to the real estate market and in the absence of some financial assistance likely could not afford to buy such a home.

Thus the demographics of our aging population, the high cost of real estate and the increasingly uncertain economic conditions, will combine to ensure the future proliferation of such arrangements. Just as certainly, there will be a boom in related litigation when such arrangements fail.

These informal agreements unfortunately leave disastrous legal problems for the parties when they fail. The results may be especially serious for the senior. The outcome is often the outright loss of the home leaving the senior extremely vulnerable. On the other hand, after many years service, the caregiver may become embroiled in litigation with rival siblings who suspect undue influence on the parent.

There are many legal pitfalls to informal care for life agreements. Invariably there is little consideration by the parties of the innumerable hypothetical questions that should be asked before concluding such an arrangement. A myriad of potential problems may thwart the success of such arrangements. They include control issues, unforeseen longevity or early death, incompatibility, depression, hospitalization, divorce or financial ruin of the caregiver.

A review of case law indicates that most care for life arrangements fail because of the breakdown of the relationship between the parties. The individual expectations are rarely discussed in advance, let alone reduced to writing. Such breakdowns may result in the senior being evicted from his or her former home. In effect they may lose their home and their financial security without receiving the emotional security of the promised long term care. Needless to say, such a loss will render a senior financially, psychologically and emotionally insecure.

A carefully drafted care agreement prepared by a lawyer will usually provide better protection to both seniors and caregivers. It is however, a simple fact that many people will continue to make informal arrangements on their own. There are a number of motives for avoiding the use of lawyers, ranging from false sense of economy to a preference to follow “a wish and a prayer” that things will work out. Indeed some seniors are even reluctant to mention the care agreement when providing legal instructions to transfer the property to a child or friend.

From a practice point of view, a lawyer or notary should always make detailed enquiries to determine the reasons a substantial asset is being transferred for little or no consideration. If the underlying facts indicate that a “care for life arrangement” exists, then written advice is essential urging the client to protect himself or herself properly documenting the agreement in writing. A detailed written agreement may also help minimize future family conflict. It can assist in explaining the arrangement to other family members who might otherwise challenge the land transfer after the senior’s death. At the very least, where the home or other real property is to be transferred to the caregiver, the legal adviser should urge the senior to register a life interest against the title.


Almost invariably the informality of care for life arrangements will create difficulties for courts charged with interpreting the actual terms of the agreement. A review of current case law indicates the challenge to courts faced with litigation involving such arrangements. It seems the courts are pulled between handling such matters as contract cases or treating such transfers as gifts. In the case of contracts they must apply the legal principles of contract law. In the case of gifts they may apply equitable principles such as undue influence, unconscionable transactions, or resulting trusts. The problem for those wishing to review the law is compounded by difficulty in finding the appropriate index titles. For eg. case law in this area may be reported under several different headings such as “undue influence”. It is likely not referenced to litigation involving “care for life” agreements.

While such agreements may appear to be contracts, the courts often presume that family members are relying on mutual trust and affection and do not intend to create legal relations in their arrangements. Thus, the most recent cases tend to treat such informal care agreements as gifts, rather than contracts.

While there are usually only fleeting discussions as to the terms of the care arrangement, the transfer of the property from the senior to the caregiver, will certainly create legal relations between them. Subsequent litigation usually involves the question of who owns what interest in the subject property.

If the courts conclude the care agreement amounted to a contract they are then expected to interpret the contract and determine any damages payable for breach of that contract. The law relating to contract will be involved, including:

(a) The intention of the parties to legally contract. Was there a meeting of the minds and the necessary intent to make a binding contract?

(b) Consideration. If there is a contract, then the promise to care will generally be found as the consideration for the transfer of the property;

(c) Terms of the Contract. An oral agreement to provide care for life will invariably raise many issues of the express and implied terms based on the reasonable expectations

(d) Uncertainty. In the decision of Folia v Trelinski, 1996 New Westminster Supreme Court Registry No. 19961104, a promise to care for a parent for life was found to be enforceable. It was held not to be uncertain.

In that case, a mother transferred her home to her daughter and son-in-law. In exchange they promised to care for her and to allow her continue to live in the home the transaction set aside. The relationship broke down very quickly.

The mother left the house and ultimately sued to have the transaction set aside. The caregivers asked the mother to vacate the home during the ongoing litigation.

The Courts enforced the agreement and stated that the mother had not been permanently evicted, and was only evicted for the duration of the litigation. Therefore, the act of asking the mother to leave the home, did not repudiate the contract. The mother was only allowed damages for the time period out of the home, as under the care agreement, the children were to provide care. In his reasons for judgment, the judge stated living together for the parties, particularly after the litigation, will be difficult, but not impossible.

Surely neither party was satisfied with that outcome


e) Breach of Contract

If an important term of the contract is not performed, the aggrieved party can sue for damages or, if the term of the contract is sufficiently important, then to treat the contract at an end.
Rescission of the contract is another remedy, where the Courts may order compensation so as to put the parties back to the position that they were in before entering the agreement.

The problem from the senior=s perspective, is that contract law can often be applied by the Courts in a somewhat harsh manner, just as it was in the Folia case aforesaid. Contract law is far more rigid in its application and remedies than legal remedies that flow from the Courts of Equity. As seen in the Folia v Trelinski case, the Courts gave a contract law remedy of damages only. The Court=s view that it is the parties that make their own bargain, and unless it is unconscionable, then the Courts may well enforce what may be a poor bargain between the senior and the care giver.

As previously stated, most courts tend to view the transfer by the senior as a gift. In Peter v Beblow 1993 1 S.C.R., the Court defined a gift as Athe intentional giving to another without expectation of remuneration

Probably the most common allegation made in this type of litigation is that of undue influence. This was the situation in Hicks v Hicks, (1997) B.C.J. No. 296, in which I was counsel . My client was a son of the senior and he successfully had a transfer of land set aside after his mother=s life, in favour of his

The amount of influence must amount to coercion. It is often difficult to prove, as there are rarely any witnesses to the influence that was exerted. The Court will investigate any suspicious circumstances

Another equitable remedy available to the Courts is to find that there is a resulting trust, which is an implied trust that is created when a person transfers legal title to another , (usually for little or no consideration), but intends to retain the beneficial interest. The Courts of equity presume a bargain, and in such a situation, the Courts will often presume that the property is held in trust by the recipient for the transferor or his or her estate. This presumption can be rebutted by evidence showing that the transfer was intended to be a gift.


As stated above, it is my view that these types of arrangements will continue to proliferate in the future, and will undoubtedly lead to an increase in litigation in this area. The B.C Law Institute ( formerly the Law reform Commission) is currently undertaking a project to investigate these agreements and determine what if anything should be done about them. For example, the State of Alabama has a statute that states A any conveyance of realty wherein a material part of the consideration is the agreement of the grantee ( the caregiver) to support the grantor( the senior) during life is void at the option of the grantor (senior).

It is important for seniors in particular to know that disastrous legal problems can occur, often to their detriment, when they enter into these types of care for life agreements with family or friends, and the arrangement does not work out. Seniors need to be educated about these pitfalls and encouraged to reduce the contract to writing, preferably with legal assistance. Practitioners, need to be educated to ask the right questions of the seniors when transfers of homes are occurring to family or friends for little or no consideration. If the practitioner fails to take adequate steps to protect the rights of the seniors in those situations, then the professional may be met in the future with an allegation of professional negligence.

Thanks and acknowledgment to Professor Margaret Hall, of the University of British Columbia, for her extensive work involving the Law Institute’s project on Legal issues affecting seniors and providing me with her consultation paper and background materials, which I made use of in the preparation of this paper.

The ultimate in elder abuse can even occur as a result of an incentive on the part of an abusive caregiver to hasten the death of the senior.

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