Grandparent's Guide: Legal and Financial Concerns
Helping to Raise Your Children's Children
This web page is an excerpt from the Grandparent's Guide brochure written as a joint project of the Beatitudes Center for Developing Older Adult Resources (Center D.O.A.R.) and BlueCross/BlueShield of Arizona.
Other articles from this series found "Grandparents" subtopic are:
More and more grandparents from all socio-economic and ethnic groups are becoming primary caregivers for their grandchildren. Grandparents are often unprepared and ill-equipped to these new responsibilities. To help make the task easier, it is important to know the physical and emotional needs of children as they grow, and the legal options and community resources available to grandparents raising grandchildren. This web page will help to serve as a guide for grandparent caregivers. It is also a reminder that those who care for others can do a better job if they pay attention to their own needs. This series from Center D.O.A.R. has basic information for grandparents about a variety of topics which can help the grandparent caregiver and, at the same time, enhance the lives of grandchildren in their care.
When grandparents care for their grandchildren, many questions come to mind:
None of these questions can be answered easily and the solution will vary according to the individual situation. But, when a grandparent assumes responsibility for a grandchild, it creates stresses affecting everyone involved. These stresses may include physical, legal, financial, and emotional issues.
Nationally, the average age of grandparents raising grandchildren is 55. However, many grandparents in their 70's and beyond have responsibilities for grandchildren. The energy level of children can be tiring for people of any age. But if grandparents are experiencing physical difficulties of their own, raising a grandchild can be especially taxing. Add to this general housekeeping activities such as cleaning, laundry, shopping and meal preparation, and the physical stresses may appear overwhelming.
Babies and younger children present another set of challenges. Lifting, changing, bathing, and feeding may require considerable strength and agility. Grandparents must make certain to get proper nutrition and sufficient rest.
Financial and Legal Stress
The care of grandchildren has many financial dimensions. For those services that cannot be provided by family members (medical, pharmaceutical, therapeutic, etc.), decisions need to be made as to where services will be secured and who will pay for them. Many grandparents are retired and living on fixed incomes. Often they do not receive financial support from the child's parents. Grandparents subsidize daily living expenses as far as they are able. But insurance, food, clothing, and education expenses can create significant financial burdens for grandparents raising grandchildren.
Legal issues are another source of stress. There are three common types of custody: Legal custody, guardianship, and adoption. Grandparents must decide which of these would be the most appropriate for them and their grandchildren. Delicate family problems can place burdens on family relationships when legal issues must be addressed. If no form of legal custody exists, grandparents need a power of attorney so that they may obtain medical help for their grandchildren. When formal custody becomes necessary, grandparents may wish to hire an attorney who will handle the details. Legal issues can create financial burdens and also increase emotional tension for the family.
Legal concerns are among the most complicated and sensitive issues facing grandparents raising grandchildren. Though assuming responsibility for a grandchild may cause conflicts among family members, grandparents are willing to make the sacrifices necessary to improve the lives of their grandchildren. Hiring an attorney and working with courts can be frustrating, confusing, and costly. The information on this web page is designed to answer some of the questions grandparents might have concerning this important topic.
One of the most important problems facing grandparents raising grandchildren is custody. There are four types of custody:
INFORMAL CUSTODY (when grandchildren are merely residing with grandparents) is one of the most common arrangements. It offers the least protection for both grandparents and grandchildren. With this arrangement, grandparents have physical custody while legal custody remains with the parents. Grandparents in this situation may not be able to enroll the children in school, or obtain medical treatment and financial assistance. Grandparents with informal custody have no legal control. The child's parents may take the child at any time and grandparents have no legal right to interfere. Grandparents may be entitled to financial and medical assistance through a government program even with informal custody if their grandchildren have been with them over a period of time.
With COURT PLACEMENT or FOSTER CARE, the court retains legal custody of the child, but someone else may be awarded physical custody. Because of the shortage of available foster homes and an increase in the number of children needing court protection and placement, many states now rely more on relatives to assume the role of foster parents.
With court placement, grandparents have limited rights. They have physical custody and authority to enroll the child in school and seek medical attention, but the child remains a ward of the court. Grandparents have more legal protection and may receive higher government benefits with court placement but their authoritative freedom is limited. They must comply with court visitation and child welfare agency regulations. Because of the financial payment, grandparents with limited incomes may opt to become foster parents, despite the restrictions placed on their authority by the courts.
GUARDIANSHIP is another option. It gives grandparents both physical and legal custody. Guardianship does not terminate parental rights, but it does suspend them. It gives the grandparent more legal control and authority to make decisions such as where their grandchild lives (within the state), to enroll the child in school, to seek medical attention, and to make decisions about the child that a parent normally makes. They also have control over when and how the grandchild sees his/her parents, unless there is a court-ordered visitation schedule. Some limitations do exist: the grandparent cannot make decisions about the child's religion or move the child out of state without permission of the court. They are not entitled to the child's earnings or property, but they also bear no financial responsibility for the grandchild. The grandparent is only responsible for the care and safety of the child while under their guardianship. Filing for guardianship can be costly, especially if the parents or other relatives contest the petition. There may also be a reduction in foster care benefits which many grandparents cannot afford to lose.
There are also emotional risks involved when filing for guardianship. In order to suspend parental rights, grandparents must prove that the parent is unfit and may be harmful to the child. It is important to note that guardianship is not necessarily a permanent arrangement.
If the court can prove that returning the grandchild to his/her parents or assigning another guardian would be in the child's best interest, they may do so. ADOPTION is the only secure and permanent form of custody. Parental rights are terminated and the child becomes the sole responsibility of his/her grandparents.
Some important facts:
Because a grandparent's health may change over time, it is important to decide who would be named to make decisions for the grandparent, since these decisions may also effect grandchildren. Advance directives are legal documents that allow/ a person to appoint someone to make decisions for them if they become incapacitated. Everyone should have a WILL, but it is especially important for grandparents raising grandchildren and essential if they have adopted their grandchild.
Many older persons made wills years ago and have not updated them. When grandparents assume responsibility for grandchildren, it is important that they make arrangements for someone to care for the children after their death. Thus they need to carefully choose an executor (the person who will be in charge of carrying out their wishes as specified in the will). Last will and testament forms are available in stationary stores, or an attorney may be hired. There are also legal aid offices "which provide services for people with limited incomes.
A LIVING WILL allows a person with a terminal illness to have some control over the kind of medical treatment he/she will receive. They are written instructions that state a person's preference regarding the use of extraordinary measures to extend life when there is no hope of recovery. It becomes active with the loss of a person's mental competence and/or the ability to communicate due to disease or injury. A living will provides the opportunity to state conditions under which a person wishes medical treatment be given or withheld and the type of treatment to be considered. It is good to review and update a living will periodically.
The DURABLE POWER OF ATTORNEY (also called a "health-care proxy") allows a person to give authority to another person to make legal, financial, or health care decisions on his/her behalf if he/she becomes incapacitated. Anyone can serve as the executor of the power of attorney spouse, friend, relative, or attorney. Though preprinted forms are readily available, a power of attorney drafted by a lawyer gives a person more flexibility and can be drawn to meet a person's specific needs. Since the durable power of attorney is not subject to on-going supervision by the courts, it is important that grandparents choose the executor of the power of attorney carefully. It is also wise to periodically review the durable power of attorney to make sure that it continues to reflect the grandparent's wishes and needs.
Choosing an Attorney
If it is necessary to seek legal counsel, it becomes a matter of finding the right lawyer for an individual's needs. It is important to look for a lawyer who has had experience with child welfare law and custody issues. Choose one you will feel comfortable talking with, one who listens attentively, and who is respectful of you and of your situation. Those who attend a grandparent support group may be able to find an appropriate lawyer through referrals from other members of the group. You may also call the family law section of your city or county bar association. A local court where child welfare cases are decided may be able to provide you with a list of lawyers trained in child welfare law. There are also government-sponsored law offices which help those who cannot afford to pay for legal expertise. They can be found in the government pages of the phone book.
Raising a child in today's world is expensive! Costs of food, clothing and education can place a financial burden on grandparents with fixed or limited incomes. Help is often available through government programs. But there may be eligibility requirements. Grandparents raising grandchildren need to have detailed records of their financial status, as well as that of their grandchildren. They may need to seek help from friends and family to assist them in compiling these records.
Compiling an Inventory
Financial issues can present a challenge to grandparents raising grandchildren on limited and/or fixed incomes. It is important for grandparents to keep good records regarding their own financial situation, as well as that of their grandchildren. Developing an inventory listing all assets and liabilities is a good first step toward proper financial affairs management. The following items should be included: Bank accounts, savings account pass books, certificates of deposit, money market funds, stocks and bonds, real estate deeds, promissory notes, contracts, insurance policies, safety deposit boxes (including location of the key), and retirement or pension benefits. Location of the records for each asset and liability also should be included.
Other important documents, such as birth and marriage certificates, social security numbers, divorce decrees and property settlements, income tax returns (state and federal), death certificates, and wills (including the attorney's name) or trust agreements, should be listed and the location designated. This should also include documentation as to the legal status of custody regarding grandchildren and should state who is best able to take responsibility for the care and rearing of grandchildren should grandparents become incapacitated or die. This inventory should be copied and stored in a safe place, perhaps a safety deposit box or with a trusted friend or relative. It is important to review the list annually.
Getting Financial Assistance
Because many grandparents raising grandchildren are retired and living on a fixed income, they may need financial assistance to help with the added expense of raising a second family. There are public assistance programs available to grandparents. Applying for these programs generally requires completion of an application form, an interview with an eligibility worker, proof of the family situation (relationship and living arrangements of grandchildren), and often a home visit.These programs include:
AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) provides monthly cash payments to assist in the care of needy children through federal funding to the states. It provides money and medical aid to children, usually under the age of eighteen, who have no parental support or care. Grandparents may apply for AFDC in two ways:
FOOD STAMPS are issued monthly. The amount of stamps issued is based on the number of people residing in the household and the total household income. Grandparents must provide proof of their income and that of all members of the household. They may also need proof of assets (such as bank accounts), and expenses, (such as rent, utility, and medical costs) and the total number of people living in the household. Grandparents do not need legal custody of grandchildren to obtain food stamps, but they cannot apply just on behalf of the grandchild. The entire household must qualify for this assistance. Apply at the county Department of Social Services office. Often AFDC and food stamp applications may be filled out at the same time.
SUPPLEMENTAL SECURITY INCOME (SSI) provides financial assistance for low income, elderly, blind or disabled people (including children). A grandchild may qualify for assistance if he/she is blind or disabled and meets the income requirements. Grandchildren can also qualify based on a mental disorder, mental retardation, or a physical handicap. Apply for SSI at the local Social Security Administration Office. Call 1-800-772-1213 to find the nearest office. Call first and request an application packet. This should include a list of the documents needed to submit an application.
EARNED INCOME TAX CREDIT (EIC) benefits low and moderate income working people and their children. This includes grandparents raising grandchildren. It is administered by the United States Internal Revenue Service (IRS), and provides grandparents with a cash payment. It is based on a percentage of the grandparent's earned income. The grandchild must qualify based on three factors: Age, residency and relationship. The grandchild must be under the age of 19, or under the age of 24 and a full-time student, or permanently and totally disabled. A grandchild must have lived with his/her grandparents in the same home for more than six months, and the home must be in the United States. Grandparents do not need legal custody of a grandchild, nor is there a requirement that the grandchild must be a dependent to establish a relationship. The dependent only needs to be a biological or adopted child, a descendant (grandchild), stepchild, or an eligible foster child. Grandparents must have worked during the tax year for which they are applying in order to qualify.
To apply for EIC, contact the local IRS office for the necessary forms and instructions. Call the IRS at 1-800-829-1040 for further information, free tax advice, and help in filling out the necessary forms. Also, the AARP Tax Aide program can help fill out tax forms. They are at various locations, usually senior centers, from February 1 through April 15.
If there are problems applying for public benefits, grandparents may obtain free or low cost legal help through local Legal Services, or Legal Counseling programs for the Elderly. There may be income requirements to qualify for legal assistance. It is important not to be discouraged when applying for these programs. Ask questions and be persistent.
Revised June 2003