Long-term care facility contracts

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Nobody would buy a home without being represented by a real estate attorney.

So why is it that most seniors are signing nursing home and other long-term-care contracts that require them to pay $6,000 to $10,000 a month for the rest of their lives and never give them to an elder law attorney to review?

Nursing homes in our metropolitan area can cost anywhere from $6,000 to $10,000 a month. That means that the nursing home contract can cost you between $72,000 and $120,000 a year! How can you enter into a contract of this magnitude without adequate legal advise?

Oftentimes, the children of our elderly are signing these contracts on behalf of mom or dad without the advice of an elder law attorney. An adult child may unknowingly put themselves in a position where a nursing home may argue that the child is personally liable under the contract!

We understand that nursing homes want to make sure that their residents sign an agreement that will ensure that the nursing home is being paid in full. Fair enough.

But prospective residents need to take steps, which are both legal and ethical under the Medicaid rules, to increase their chances of qualifying for Medicaid while also satisfying the payment requirements that a well-run nursing home justifiably requests in order to keep the nursing home financially viable.

Quite often, clients have a spending history prior to entering the nursing home that may result in a period of Medicaid ineligibility. Our goal as elder law attorneys is to assist the clients in setting aside some of their assets, in a manner that is permissible under the Medicaid rules, so that the client can cover their cost of care when this ineligibility period is imposed by Medicaid.

Prospective residents also need to create a “rainy day fund” for their remaining years with which they may buy hearing aids, have infected teeth extracted, receive foot care, buy eyeglasses, purchase a TV for their room, etc. Medicaid does not cover these items.

You can’t cover these costs when you are spent down to the Medicaid asset level of $2,000, with an income of $30 a month. A good elder law attorney will work with a nursing home to review and modify the contract to accommodate these inevitable needs.

For more, call 847-292-1220, e-mail abferraro@abferrarolaw.com or visit www.ABFerraroLaw.com.

About Anthony B. Ferraro

Anthony B. Ferraro is the founder and managing member at the Law Offices of Anthony B. Ferraro. He received his Bachelor of Science degree in accountancy from DePaul University and his Master of Science in taxation. After receiving his CPA designation in 1978, he enrolled in law school, earning his Juris Doctor in 1983 from De Paul University. An elder law practitioner, his practice areas include Medicaid planning and applications, guardianship, probate & trust administration, long-term care planning, nursing home contracts and admission, senior estate planning, special needs planning, estate planning, and estate taxation.

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