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In Michigan, my mother is very sick. She is being transferred from a hospital to a nursing home to recover from surgery and for physical therapy.

Someone told me that my father should legally remove my mother from assets such as the house and bank account; otherwise the nursing home would take them as payment.

I need to make sure that their health insurance covers the nursing home, but if not, what would happen legally? Can the nursing home take my parents' house? Would all claims be deferred until after both parents pass away, and then be made against the estate? Or what?

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    Is your mother eligible for Medicare or Medicaid? – user662852 Sep 17 '16 at 10:41
  • I'm not sure. I'll have to check. But let's say that she isn't, that there are unpaid bills--in that situation, what legal recourse would the nursing home have? – Chad Schultz Sep 17 '16 at 14:32
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    If her health insurance is Medicare or Medicaid, there are "look back" provisions to see if assets have been recently transferred. – mkennedy Sep 18 '16 at 16:30
  • I don't believe she is eligible for either. My parents are in their early 60s, so too young for Medicare. I think my dad would have to make less than $16,000 a year for them to qualify for Medicaid, so that doesn't apply either. – Chad Schultz Sep 18 '16 at 17:56
  • How is he even supposed to "remove her from assets"? If she is the (partial) owner, you cannot remove her - otherwise I could just "remove" you from your house and go live in it instead. – sleske Oct 2 '18 at 8:58
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The details are a bit unclear, but here's some general guidance:

I need to make sure that their health insurance covers the nursing home, but if not, what would happen legally? Can the nursing home take my parents' house? Would all claims be deferred until after both parents pass away, and then be made against the estate? Or what?

In general, the nursing home may (and will) invoice the cost to the patient, your mother. Now there are multiple possibilities:

  • If your mother has enough money or other assets, she (or someone acting on her behalf) will have to pay. If need be, she will have to liquidate assets (such as a house, car, jewelry) to pay. There are some limitations, however, for example, a primary residence may be protected, and if the house is jointly owned, there may be protection as well, but it is not inconceivable your father may have to sell the house. That depends on the details.
  • If your mother does not have sufficient assets, close relatives (such as the husband, parents or children) may be liable, under the rule that relatives are required to assist each other with respect to vital needs such as food, housing and medical care (under alimony and filial responsibility laws). However, again there are various rules and limitations in place, depending on specifics, and such laws do not exist in all jurisdictions.

Would all claims be deferred until after both parents pass away, and then be made against the estate? Or what?

No, usually there is no such rule - that would be very problematic for any creditor, since you can't expect them to wait for payment for so long (possibly for decades). The claim will usually become due as normal, and it will be owed by either your mother or possibly her relatives, as explained above.

Someone told me that my father should legally remove my mother from assets such as the house and bank account; otherwise the nursing home would take them as payment.

That does not make a lot of sense. First, if she is (partial) owner of an asset, you cannot just "remove" her, as that would mean taking away her ownership. Even if she consents to giving away her property, there are usually rules allowing to reverse the transfer if it was only to avoid paying a creditor (often called "claw-back provisions"). So I would not do anything in that direction without legal advice.

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  • When you say ‘usually, close relatives may be liable’ do you mean that usually, only a close relative would voluntarily guarantee another person’s contractual obligations? The question seems inconsistent with the father voluntarily assuming responsibility, and while I’m not familiar with the law in Michigan, it would be very unusual if there was a law imposing liability on family members, close or otherwise, for contracts they never guaranteed. – sjy Oct 2 '18 at 9:34
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    @sjy: No, close relatives are not liable for contracts in general, but specifically for expenses that are considered essential ("filial responsibilities"). I edited to clarify. – sleske Oct 2 '18 at 9:46
  • Actually removing asset ownership for defrauding creditors is also in most jurisdictions a criminal offense. – TomTom Oct 2 '18 at 12:13
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    @sleske Thanks for the clarification! I wasn’t aware of filial responsibility laws and was surprised to find that there actually are recent cases where nursing homes have used them to sue the children of elderly parents directly, without a contract (mainly in Pennsylvania). A lot of the Google results lack detail, but this 2016 LLM thesis cites and summarises some recent cases. – sjy Oct 2 '18 at 14:41

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