Nursing Home Resident Trust Fund

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.

Such trust funds may be organized as single accounts that commingle money contributed by all of the residents who choose to use it. However, each resident’s credits and debits must be tracked separately, and the nursing home resident or the resident’s appointed financial representative must approve every transaction.

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.

Key Takeaways

  • A nursing home resident trust fund is an account funded by patients and intended strictly for their use.
  • Nursing homes are required to maintain such funds.
  • They are typically used as a petty cash account for miscellaneous expenses.

Nursing Home Resident Trust Fund Explained

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.

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.

Special 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.

Rules and Technicalities of the 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.

Article Sources

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  1. Centers for Medicare and Medicaid Services. "CFR Section 483.10 Resident Rights," Pages 47-48. Accessed Sept. 4, 2021.

  2. Centers for Medicare & Medicaid Services. "Enforcement and Compliance Overview." Accessed Sept. 4, 2021.

  3. Medicare.gov. "Find and Compare Nursing Homes, Hospitals, and Other Providers Near You." Accessed Sept. 4, 2021.

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