There is no law in Texas that requires an adult child to pay a parent’s nursing home bill out of their own personal funds. Likewise, under federal law a nursing home cannot require you to commit to pay your parent’s nursing home bill before admitting your parent to the facility. However, this does not mean a nursing home may not try to obligate you to take financial responsibility for payment of your parent’s nursing home bills by the words used in the nursing home admission agreement. The main pitfall is in the contract with the nursing home.
The nursing home admission agreement is a binding contract. Under federal law, a nursing home cannot require a third party to be personally responsible for the resident’s nursing home bill or for securing payment from Medicare, Medicaid or insurance. The federal definition of “responsible party” refers solely to the person who is responsible for using the resident’s money for the resident’s benefit. Commonly, however, the nursing home admission contract will include a more expansive definition of the term “responsible party” than the federal law. Thus, you should read the nursing home admission agreement very carefully. Make sure it does not personally obligate you as the “responsible party” to pay the resident’s nursing home bill in the event your parent does not have sufficient funds or fails to qualify for Medicaid.
If your parent is competent, they should sign the admission agreement. If there is a question whether your parent has capacity to enter a contract, or they are unable to sign the agreement upon admission, then the agreement should be signed by an agent appointed under a financial power attorney. If there is no financial power of attorney in place, you should consider consulting your attorney before signing the nursing home admission agreement for your parents.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
