Can I Be Held Responsible for Nursing Home Bills as Power of Attorney for an Individual?

By Wayne Thomas

Losing the ability to make decisions regarding personal finances is a reality that often comes with advanced age. For elderly people who are nursing home residents, having an effective power of attorney (POA) in place helps ensure that day-to-day financial affairs will be handled in the case of incapacity. However, agreeing to serve as an agent under a POA does not make you personally responsible for payment of nursing home bills. For that reason, the law provides that you make decisions that further the best interest of the incapacitated person.

Overview of POA

A financial POA is a document that grants you, the agent, the ability to manage the day-to-day financial affairs of an incapacitated person, the principal. State law varies on the amount of power that can be provided to you by the principal. For elderly nursing home residents, an important part of this relationship is the payment of nursing home bills.

Agent Not Liable

Although a financial POA gives you control over the finances of the principal, you do not become personally liable for debts incurred by the principal. This means that even if nursing home bills exceed the principal's ability to pay, you do not have to use your assets to cover the outstanding balance. Because your personal finances are not relevant, they also do not affect the principal's ability to receive need-based support, such as Medicaid. The only exception to this rule would be if you entered into a written agreement with the nursing home to be personally responsible for expenses incurred by the principal.

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Binding the Principal

While you are not personally responsible for expenses that exceed a principal's ability to pay, it is within your authority to bind the principal to financial obligations. You have the power to approve certain expenses, including nursing home bills, which effectively obligate the principal to pay the bill. It is important that you take into consideration the available resources of the principal in making care-related decisions.

Duty of Care

Because of the power you exercise over the principal's financial affairs, you are required by law to act as a "fiduciary" to the principal. This means that you must make decisions in good faith and based on the principal's reasonable expectations. If those expectations are unknown, you must act in the principal's best interest, which may or may not be in line with how you would act with your own finances.

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References

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How to Appoint a Power of Attorney

A power of attorney allows one person to act on behalf of another person in various matters, including health or finances. You may give another person, known as your agent or attorney-in-fact, power of attorney as long as you're mentally competent. You must draft a power of attorney document that meets the legal requirements in your state in order to give your agent authority.

North Dakota Power of Attorney Laws

In North Dakota, you have the option of creating a power of attorney, or POA, to give another person the authority to act on your behalf when it comes to financial matters. These financial matters could include anything from that can access your bank accounts, who can pay bills or who can purchase or sell property. Under North Dakota law, the authority you grant may be as broad or as specific as you like, and you always have the option of revoking this authority at any time.

Does a Power of Attorney Need Both Signatures?

A power of attorney allows another person to step into your shoes to make medical or financial decisions for you. The rules for creating a power-of-attorney document vary among states, but all jurisdictions require your signature and some also require the signature of the person you have appointed as your agent.

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