Key Takeaways
- A nursing home resident trust fund is an account managed by a facility to help residents cover extra expenses.
- Residents must approve every transaction from their trust fund.
- Funds left in the trust are returned to the resident or the estate if the resident leaves or passes away.
- Federal regulations require funds over $50 to be kept in interest-bearing accounts.
What Is a Nursing Home Resident Trust Fund?
A nursing home resident trust fund is an account that is held by a long-term care facility or senior care center on behalf of its residents and is used to help them cover any extra expenses they incur. These funds are essential for residents who need assistance with managing day-to-day expenses while living in a nursing home. They ensure that residents maintain financial autonomy over their own money by requiring facilities to track transactions and obtain approval from residents or their representatives for each use of the funds.
Such trust funds may be organized as single accounts that commingle money contributed by all of the residents who choose to use it. Each resident’s credits and debits must be tracked separately. If the resident leaves the home or dies, any unspent funds must be returned to the resident or the resident’s estate within 30 days.
Understanding Nursing Home Resident Trust Funds
Nursing homes are required to offer residents trust funds, but they cannot require residents to deposit money in them. Nursing homes don’t have the legal right to manage their residents’ finances and must receive express permission from a patient before using these funds for any purpose.
Social Security funds, pension checks, and gifts to residents may be deposited into these accounts.
Important
The accounts, and all other aspects of nursing home management, are subject to inspection by the Centers for Medicaid and Medicare Services if they are licensed by either or both of those agencies.
Important Considerations
Patients who choose to use the trust fund have the right to access their financial statements, and to approve exactly how every penny placed in the trust fund is used. The homes are also required to have protection, such as a surety bond for trust funds.
Nursing home resident trust funds are intended to allow their residents some control over their own finances and access to petty cash, even if they are mentally or physically incapacitated. They are a convenience for residents.
However, these funds are vulnerable to misuse by unethical employees of the home, and residents may not learn of the theft until significant damage has been done.
Any facility that is certified by Medicare or Medicaid, and therefore receives funds from either, is subject to regular inspection of the operations, including the maintenance of this account. The results of those inspections go into a Nursing Home Compare application, which allows for a comparison of the quality of care at facilities nationwide. The site is managed by the Centers for Medicaid and Medicare Services.
Key Regulations Governing Nursing Home Resident Trust Funds
These are essentially petty cash accounts and are subject to various federal regulations, including:
- Any amount above $50 must be placed in an interest-bearing account until needed, and the interest must be credited regularly to the account owner.
- Residents who receive Medicaid benefits may have their payments reduced if their accounts go above a certain level.
In addition, many states impose their own regulations on nursing home resident trust funds.