USE CAUTION WHEN SIGNING AN
ADMISSIONS AGREEMENT ON BEHALF OF ANOTHER
There may come a time at some point in your adult life in which you are required to have your loved one move into a nursing home or similar type of long-term care facility. Your loved one may be unable to sign the admissions agreement and the facility may ask you, as either agent, attorney-in-fact, or guardian of your loved one, to sign the admissions agreement in their stead. Such an admissions agreement is a binding contract, and should be reviewed very carefully, perhaps by an attorney, before signing.
Many admissions agreements use terms such as “resident,” “responsible party” and “guarantor.” These terms are important to consider because the facility may include language that makes you as the “responsible party” or “guarantor” liable for the cost of your loved ones care in case funds are exhausted or there are issues with Medicare, Medicaid or insurance. However, you should know that both under Federal law and New Jersey law, the facility is prohibited from requiring a guaranteed payment by a third-party of the resident’s expenses as a condition of admission or continued admission. Unfortunately, this does not always prevent a facility from including such a requirement in their admissions agreement. You should never sign such a guarantee in your individual capacity. Additionally, although facilities cannot outright make a third-party guarantee payment, depending on the circumstances, a third-party may be liable for actions taken on behalf of the loved one under fiduciary obligations if the third-party is serving as agent, attorney-in-fact, or guardian. In most instances, a fiduciary is not liable to a third person for acts of the loved one solely by reason of the relationship. However, if as fiduciary you fail to abide by a required duty on behalf of your loved one, you may be personally liable for such payment.
It should be noted that New Jersey is 1 of 29 states to still have a filial responsibility law on the books that may further complicate admitting a loved one, specifically a parent or spouse, into a facility. Specifically, in New Jersey, adults between the ages of 18 and 55 may be personally financially responsible for the support of an indigent relative such as a parent if the adult has the means to support such an indigent relative. As it relates to spouses, the law would apply regardless if the adult is over the age of 55. However, the filial responsibility only applies if the indigent relative applies for and is eligible to receive public assistance. Regardless, New Jersey’s filial responsibility statute is rarely enforced, but should remain something to be cognizant about.
We at Pashman Stein Walder Hayden, P.C. have helped many families with issues pertaining to admissions agreements. If you find yourself in such a situation, do not hesitate to call us for assistance.