Points to Note In Signing Long Term Care Agreements
When moving to a Continuing Care Retirement Community or Assisted Living or Skilled Nursing facility, one of the last things that families might consider is the legal effect of documents signed on admission. This is not surprising. Between scheduling the movers and cleaning out the home, remembering to pack the glasses, medications and hearing aids and filing a change of address, listing the house for sale and arranging for storage of items that cannot be sold or given away, the list of tasks is daunting.
When they are asked to sign documents, families may be experiencing overload.
Applicants for a CCRC might receive additional legal documents including Shareholders’ Agreements, a sample Life Estate Deed, Association policies, and details concerning initial deposits and refunds.
On entering Assisted Living and, especially Skilled Nursing, the applicant’s family often is operating under the stress of the moment. Papers for signing may include everything from laundry policies to pharmacy selection, financial disclosures and statements of residents’ rights.
When told by adult children or by spouses that they only need to complete some forms, I sometimes am concerned about what they may be signing. There are specific questions that the trained eye looks for that are not generally apparent to the person completing the form.
Here are some legal issues to consider before, not after signing.
Are You a Guarantor, Indemnitor, Responsible Party, Power of Attorney or Just a Family Member? All agreements will say that the applicant is responsible for payment from his own assets and rightly so. Only new nursing home admissions to Medicaid certified facilities where the applicant’s funds are so low that he or she qualifies for Medicaid initially might avoid payment altogether. Even then, the Medicaid application and related documents must be handled properly or the family can be at risk.
If the resident cannot sign and his power of attorney, spouse or other family member signs an agreement, is the signor also responsible to pay from his or her own assets? It depends.
First, skilled nursing facilities that take Medicaid, under federal law, cannot demand payment on admission from an adult child or power of attorney from their own funds. However, if the Medicaid application is not successful, this status has been made less clear in the past few years by a Pennsylvania law regarding what is referred to as “filial responsibility” or a claim for support of a parent by an adult child.
An Assisted Living facility, now referred to in Pennsylvania as a Personal Care Home, since it does not take Medicaid, could ask the person who is signing for his parent to also act as a “Guarantor” or “Indemnitor.” This may mean that the adult child is agreeing to guarantee payment from his own assets if his parent cannot. If that is not the intent, then do not sign as Guarantor or Indemnitor.
A Power of Attorney is the agent for the resident. He or she is not normally obligated to pay from his funds but he must act responsibly with the money under his control and pay the bills.
The term “Responsible Party” is ambiguous. It should mean only that this person is the contact point and not a Guarantor or Indemnitor. Considering the stakes, it is best that a person who signs indicate this is as “Agent Only” or “Power of Attorney Only” unless committing his own assets.
How To Be Protected. First, seek legal advice in advance if there is any confusion since it is better to resolve financial responsibilities than to dispute them later. Second, where the person moving into the facility is competent and able to, he might sign the forms. Third, if you must sign, then state as “power of attorney only” or “as Agent only.” Avoid the use of “Guarantor,” “Indemnitor,” or “Responsible Party,” unless you, as the signor, are willing to consider paying for the care of your family member or friend. Finally, if there is a section indicating that all disputes are to be resolved by arbitration, you might ask that this be removed. Arbitrators can be chosen from the industry and you may be asked to contribute to the cost for payment.
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.