Am I Liable If I Sign A Nursing Home Agreement For Someone Else?

We are often asked by family members whether they are financially responsible for the nursing home bills of a loved one if they sign the nursing home admission contract. The answer to that question is that it depends upon the circumstances and how the contract is signed. Family members need to be careful when handling this very important transaction.

The most important thing to do to prevent a family member from becoming personally liable for such costs, is to carefully review the contract and its provisions before it’s signed.

If possible, the resident should sign the agreement himself or herself. If the resident is incapacitated, someone else may sign the agreement. Whether this person is financially responsible depends what the documents say and in what capacity the person signing acts.

To start, the person signing on behalf of the nursing home resident should not be personally liable for the charges unless she signs as guarantor. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills. Many contracts have a murky provision asking the family member to sign as “responsible party.” In some cases, this has been interpreted as a guarantor and in others as simply the person who will use the resident’s funds to pay the charges.

We counsel our clients to make it explicit that they are not signing as guarantor. Often they are signing on behalf of the nursing home resident under a durable power of attorney and they write that after their signature.

Many nursing home admission agreements contain a provision stating that all disputes regarding the resident’s care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.

It is important not to rush, but rather to read. If possible, have your attorney review the agreement before signing it because it could contain illegal or misleading provisions.