This blog post explains how long term care facilities (LTCFs) can consider utilizing guardianship and conservatorship petitions for problematic situations where a resident has named an agent under a power of attorney (POA), and the agent fails to pay the resident’s bills, thus jeopardizing the resident’s wellbeing.

Independent living facilities, assisted living facilities, and nursing homes traditionally take steps to ensure that residents have enacted financial POAs, as well as healthcare POAs, upon admittance. What happens when an agent named under a POA fails to make payments for the resident’s stay at the LTCF? The LTCF can sue the resident, a personal guarantor, and/or the agent under the POA, to collect the delinquent sums. Or, it could be more proactive by filing a petition with the court to either revoke the POA or the authority of the agent under the POA, and to appoint a guardian and/or conservator to make decisions about the resident’s finances, place of residence, etc.

The rationale for seeking a guardian and/or conservator appointment is that if an agent under a POA is not paying the resident’s bills to the LTCF, the agent may not be paying other resident costs, further jeopardizing the resident’s care and treatment. A collections action may pay the LTCF bill, but a guardianship/conservatorship petition may do more to stop potential resident abuse by the agent under the POA.

In filing such a petition, the LTCF should consider requesting appointment of an independent charitable institution as the guardian/conservator (such as Catholic Charities, Jewish Family Services, etc.). It should also consider that the agent under the POA may claim that the LTCF is “self-interested” or “only interested in money” because, if the court appoints a conservator, the result may be payment of  the LTCF bill, and ensuring regular payments moving forward. Therefore, LTCFs should consider minimizing any claims that the LTCF is not truly acting in the resident’s best interests.

First, LTCFs should be wary about filing petitions for guardianship/conservatorship when the only reason to file one is a bona fide billing dispute with an agent under a POA. That would likely come across as too cavalier on the part of the LTCF, and it probably wouldn’t afford sufficient grounds for a court to revoke a POA or revoke the agent’s POA authority.

Second, LTCFs should extensively document their attempts to obtain payment from the agent under the POA, before moving forward with a petition. Ideally, the LTCF will have documented evidence of many attempts to obtain payment, and can show a court how it repeatedly warned the agent how failure to pay for the resident’s care jeopardizes the resident’s welfare.

Third, LTCFs should attempt to assemble as much other evidence as possible to prove improper conduct by the agent. For example, the LTCF can use evidence that the agent is not paying some of the resident’s other providers; that the agent has acted dangerously  at the LTCF; or that the agent is generally unstable, in support of its petition for guardianship/conservatorship.

Fourth, to rebut the self-interest claim, the LTCF should emphasize that a guardianship/conservatorship petition is not the most efficient way to collect delinquent costs of residency. Rather, it is more time-consuming, complex, and expensive than a routine collections action. Instead, the LTCF would emphasize that it  chose the petition because it is genuinely concerned about the resident’s safety and well-being at the hands of the agent.

Fifth, to rebut extensive opposition due to self-interest charges , the LTCF may consider offering to waive  reimbursement of attorney’s fees it incurs in the guardianship/conservatorship proceeding when state law permits the petitioner to recover attorney’s fees from the resident. To be clear, a LTCF should not do that lightly, because it relinquishes a  valid reimbursement right available under many states’ laws. However, there may be a scenario where it would be the prudent thing to do to counter any allegation of crass self-interest.

In sum, petitioning for a guardian and conservator of a resident is a powerful tool in the arsenal of LTCFs, which should always be used for the benefit of the resident, even when the result of a successful petition may be that a conservator will bring current any delinquent balance to the LTCF, and will ensure regular payment going forward.