Consult an attorney before signing an ‘assisted living’ agreement

2041-Spring-General-2014-JM4An agreement to enter an assisted living facility or a nursing home is a binding contract, and it typically involves a large amount of money. Just as with a real estate contract, it’s wise to have an attorney review the agreement before you sign it, so you can understand exactly what your rights and responsibilities will be.

For instance, you’ll want to understand any initial deposits and monthly fees, and what level of service will be provided. You’ll want to know what will happen if you need additional services later, and what the cost will be. If you decide to leave, you’ll want to know how much notice is required and whether you’ll be entitled to a refund. You’ll want to know if your family is entitled to part of your deposit if you should pass away.

If you’re signing a contract for an aging relative, you’ll want to know to what extent you might become personally responsible to pay for your relative’s care.

In one recent case, Judy Andrien signed an admission agreement with a nursing home in Connecticut on behalf of her mother. Judy signed the contract as a “responsible relative,” and she agreed to pay the nursing home out of her mother’s assets and assist in arranging for Medicaid coverage.

The contract didn’t require Judy to personally guarantee payment to the nursing home out of her own pocket. However, it did say that Judy could become personally liable if she did anything that interfered with her mother’s Medicaid eligibility, or if she failed to arrange payment to the home from her mother’s assets.

Eventually a dispute arose, and the nursing home sued Judy personally for payment. Judy argued that she was protected by a state law that says a nursing home can’t require a third party to guarantee payment as a condition of admission.

But the Connecticut Superior Court refused to throw the suit out. According to the court, the agreement was valid because it didn’t directly require Judy to guarantee payment. The court said Judy could still be sued personally for “breach of contract” if she failed to live up to her promises to pay the home out of her mother’s assets and to assist in obtaining Medicaid benefits.