04 Sep Am I responsible for dad’s nursing home bills?

Q. My sisters and I are listed as joint account holders on one of my father’s checking accounts. Should he require a nursing home or medical living assistance in the future, does the fact that I am listed on the account potentially expose me to a financial obligation or liability or further encumber my own assets to pay for his ongoing medical expenses.
— Daughter

A. This is a really important question.

Too often, families are faced with serious financial decisions when a loved one needs nursing home care. At this emotional time, not all nursing homes are upfront about the rules and they can lead families to make catastrophic money mistakes.

Here’s the skinny.

Liability for nursing home expenses is determined by the residence agreement that the patient signs, or that the patient’s agent signs under a power of attorney, upon entry to the facility, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newton.

She said the agreement is a contract and the fine print matters, so you should really have an attorney review the agreement before anyone signs.

“And these residence agreements are not ‘one size fits all.’ They are generally unique to the institution,” she said. “Some are very fair to the resident and the resident’s families, and others are not at all. The terrain can be scary for the uninitiated.”

Now to the bank account.

We’re going to assume all the money in the account belongs to your dad, the person who could need care.

Reading said she’s not aware of any way a joint account owner in New Jersey . can be held personally liable for the nursing home expenses of the resident based solely on the fact that you are a joint owner.

Certainly the money in the account must all be available for the resident’s care, but that is not your question.

We’re also assuming that you did not transfer a home or other assets to yourself so that the resident would qualify more quickly for Medicaid.

Under many such circumstances, nursing homes are increasingly suing the recipient of the asset on a theory of unjust enrichment, Reading said.

“If you or one of your sisters signed paperwork upon admission making you the `responsible party’ and the agreement defines the responsible party as the person who will pays the bills when the resident can no longer pay for him or herself, then you have cause for concern,” she said. “However, N.J.S.A. 30:13-3.1 of the Nursing Home Act disallows nursing homes from requiring a third party to guarantee payment in the event that the resident runs out of money.”

Still, Reading said, she has seen residence agreements where a family member can “volunteer” to guarantee payment.

The lesson? Be very careful what you sign.

Email your questions to Ask@NJMoneyHelp.com.

This story was originally published on Sept. 4, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.