Few people realize that nursing homes can file for guardianship over their elderly or disabled residents in order to collect on unpaid debts. Even fewer experts have done research on how often nursing homes initiate proceedings or track their progress through the courts. However, what research has been completed on nursing home guardianships show that not only does the practice happen often, but it seems to be increasing in use.
Nursing Home Guardianship Statistics
The Brookdale Center of Healthy Aging and Longevity has been researching how often these types of cases occur in the state of New York. While it has not released its full report, the Center has stated that its research found that between the years 2002 and 2012, nursing homes accounted for over twelve percent of all guardianship cases in Manhattan. Outside of the city, guardianship petitions by nursing homes over their residents are also a significant percentage of the court requests. Overall, estimates show that as many as two-thirds of all guardianship proceedings across the country are petitioned by an institution or government entity.
Why Guardianship is Important
The purpose of guardianship is to transfer an incapacitated person’s right to make decisions for themselves to another person or party that is appointed by the court. Once appointed, the guardian makes all decisions regarding finances and personal affairs for the person. It is different than a durable power of attorney or healthcare proxy and actually supplants them both.
Reasons for Guardianship Petitions
Usually, a nursing home will file for guardianship of a resident if an issue is causing for unpaid debt to accumulate against the facility for long-term care. The most common reasons listed in nursing home guardianship petitions are family feuds, suspected embezzlement by loved ones, absence of family help, or for the purposes of Medicaid coverage. However, many believe that the actual cause of most guardianship petitions is to force family members of the resident to pay their unpaid bills or force a settlement of bill disputes.
In addition, a guardian is typically paid with the incapacitated person’s money. This is especially important for a nursing home that is appointed guardian because it can directly take out the money that it is owed by the resident it holds guardianship over. As guardian, a nursing home also has the last say in their resident’s care and can ensure that it continues to collect payment for their long-term care by keeping the resident in their facility.
How to Avoid Guardianship Traps
While a guardian does have access to all of the incapacitated person’s readily accessible funds, such as a bank account, it does not supplant a trustee of a trust. The best way to protect your or your loved one’s assets from an organizational guardianship proceeding is to place all of the assets into a trust before going into a nursing home or other care facility. Conversely, if only a will is used, a guardian has access to all of the assets in the will before the person dies.