You know what they say about the cobbler’s children going without shoes… My family recently realized we had made a classic mistake that any Elder Law attorney will warn about.

About 10 years ago my parents entered a Continuing Care Retirement Community (“CCRC”).  These are comprehensive facilities for older people that include a variety of living situations.  In my parents’ community, there are independent living “cottages” and apartments, assisted living apartments, a memory care assisted living section, and a skilled nursing area.  CCRCs are expensive because of the comprehensive nature of their facilities, but my parents were savers, and able to afford it.

A few years after they moved there, my mother moved to memory care, and then to skilled nursing (she passed away a few years later).  Once my mother was not around, my father was in trouble.  He was not willing or able to do housework, and his memory was beginning to go.  It quickly became obvious that he could not live on his own.

Here’s where the mistake occurred.

When he entered the assisted living part of the CCRC, there was a new contract to sign.  (I didn’t yet work for an Elder Law firm.)  We can make excuses: my mother was losing her mind and horribly anxious, my dad and all of us were very worried about her, none of the children lived nearby, we weren’t aware of the sneaky move the CCRC was pulling – but the bottom line was… we didn’t pay enough attention to what we were signing.

The admissions director was all smiles.  My sister and father did the signing, but I guarantee I would have done the same.  My father signed on the “Resident” line, and then the admissions director had my SISTER sign on the “Payer Name” line.

Oops.

My parents had their own savings.  But when you go to assisted living, it costs more, and nursing home costs a lot more.  Medicaid won’t pay for assisted living, but my parents’ CCRC does accept Medicaid for nursing home care.

If my dad ran out of money, and he was the payer, he could apply for and receive Medicaid to pay for the nursing home.  But since my sister signed as the “Payer,” it’s a very different picture.

Fast forward seven years.  My father may soon need to move to skilled nursing.  He would quickly be Medicaid eligible, since we did Elder Law planning for him once I began working at an Elder Law firm.  But the “Payer” issue is very likely to rear its ugly head.  Time for me to move to Brazil, and let my sister pick up the tab!

Just kidding.  But what can we do?

David Cutner, founding partner of our firm, gave me this advice.  If/when my dad needs nursing home care, tell the facility that he will apply for Medicaid.  If they bring up the “Payer” issue, we can remind them that my sister was (and is) the agent under my father’s Power of Attorney.  While she had the authority to pay my father’s bills with his money, she certainly had no intention of paying his bills with her own funds.

Mr. Cutner also pointed out that most facilities want to keep their beds filled.  They might prefer a Medicaid patient to no patient.  My sister could tell them that if they don’t take him as a Medicaid patient, that she will move him to another nursing home.

Fortunately for our family, moving my dad closer to family is actually a preferred workaround.  We can apply for Medicaid at the new place, making it unlikely to create a financial burden for the children.  But many people do not have this option.

Protect yourself.  Don’t sign any contract until you bring it home, read it carefully, and make sure you know who will be responsible for the costs.  If your parent is not able to sign, but you have a Power of Attorney, you can sign the contract “As Agent” or “As POA for [John Smith].”  This way you are not accepting personal responsibility for payment.  If you have a complicated situation, you may want to consult with an Elder Law attorney before you sign.

Now you know.  Don’t make the mistake that my family did.