Jan 10, 2014

Be cautious about turning over loved one's funds to nursing home

I always advise against turning over a nursing home's residents funds to the facility to be managed. It is generally more prudent for the money to be managed, or at least overseen, by a trusted family member(s), trust company such as a bank or brokerage, an attorney, or a CPA, or a combination of these. (Of course, some nursing home residents are capable of managing their own affairs, but even when that is the case, someone should still oversee their finances as a check.)

My recommendation is supported by a recent investigative report published in USA Today.  The report uncovered some disturbing facts about how a few nursing homes have mishandled residents' funds. When a nursing home resident turns over his/her funds to the facility for management, those monies are supposed to go into a trust fund, to be managed with the same rigorous controls associated with a regular bank account. Withdrawals and deposits should be documented, interest reported, regular account statements provided, etc. However, the report found some facilities falling far short of those guidelines, and in the worst case scenarios, dishonest employees were able to steal or manipulate the money. According to the report, over the past three years federal and state nursing home inspectors have issued more than 1,500 citations for trust fund mismanagement and theft. 

Obviously, most nursing home employees are trustworthy, or the incidence of these events would be far higher. Still, it pays to be vigilant. Family members must monitor the financial welfare of their loved one as closely as the physical welfare.

To read the full report, click here

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