New Hampshire Fiduciary Liability Law
February 9th, 2015 by beasleyferber
In July 2013, New Hampshire enacted RSA 151-E:19. In part, the law says:
A fiduciary who possesses or controls the income or assets of a …[nursing home] resident and has the authority and duty to file an application for Medicaid on behalf of a resident shall be liable … to the long-term care facility for all costs of care which are not covered by Medicaid due to the fiduciary’s negligence in failing to promptly and fully complete and pursue …[a Medicaid application.]
For purposes of his law, a “fiduciary” is the holder of your power of attorney or the trustee of your revocable trust. This is almost always one of your children. Say you go into a nursing home and spend down your assets. For whatever reason, your fiduciary either files the Medicaid application late or does not follow up on an application he or she has filed, and as a result your Medicaid benefits are denied or delayed. In this case, your fiduciary will be personally liable to the nursing home for your care, at the facility’s Medicaid rate, until benefits are approved. It goes without saying that this liability can be devastating.
In order to deal with this problem, we recommend that powers of attorney and revocable trusts say the following:
A. The fiduciary’s authority should only become effective when your doctor certifies in writing that you have become incompetent or when you certify in writing that you want his or her authority to become effective. In this way, your fiduciary will have notice that his or her authority has started, and will know to be extra careful in monitoring your financial status and filing a Medicaid application, if necessary.
B. The trust and power of attorney should contain a statement to be signed by your fiduciary that he or she is aware of the law, that it is especially important to file a Medicaid application on time, and that he or she get professional help in filing. (In this case, there is much less of a chance that the application will be delayed or denied.)
In our opinion, in enacting this law, the state capitulated to the financial interests of the nursing home industry to the detriment of Seniors and their families. The state has failed to recognize that fiduciaries are generally the adult children of Seniors, who give freely of their time and energy to help their parents. A Medicaid application is extremely difficult to do, and the rules are Byzantine, say the least. To potentially impose financial liability on these children, who are only trying to help their parents, is, in our opinion, shameful and shortsighted.
See our blog entry next week on the second part of this law, imposing potential liability on the recipients of gifts.