Things to Watch for When Signing an Assisted Living Contract for/with a Parent

by Paige Estigarribia

If you're at a point where you are researching different assisted living facilities for a parent, then you are probably also looking at assisted living contracts. With the average cost of an assisted living facility at $42,000 per year (source: Genworth Financial), you'll be making a sizable financial commitment.

So what should you be looking for when you're reviewing these contracts for an assisted living facility? We reached out to attorney Renee Linares Chin for some tips on things to watch when signing an assisted living contract with or for a parent. Ms. Chin is an attorney who regularly covers estate planning topics on her blog Here's what she had to say:

Q: Are there some general terms or items that most assisted living Facility contracts will have?

Ms. Chin: Assisted living facility contracts are also called resident agreements. These agreements usually contain a clause that dictates the services provided by the facility. Depending on the needs of you or your loved one, I would scrutinize this carefully to ascertain whether their needs match the services offered by the facility. For example, does this facility provide any medical care or employ staff with medical training? Also, is there transportation provided to doctors or medical appointments if no medical care is provided on site?

Privacy may be a concern. Are residents expected to share rooms or would they receive their own room? There are also additional rules or a code of conduct for behavior among residents. Know the rules and the consequences for violations.

The contract would also specify when payments are due and the grace period (30 days is an estimate) prior to late fees being assessed.

The contract would also specify the length of stay whether this is short term or long term and allow flexibility if the resident's needs change and they require a greater level of medical care than originally anticipated.

Expert Interview: Helping Aging Parents Cope When Living Separately in Assisted Living

Q: Are there certain things that one should look out for when looking through an assisted living contract?

Ms. Chin: I would watch out for a separate agreement asking you to be the "authorized representative" for your relative who is entering assisted living care. This authorized representative contract usually contains a clause, which works like a "co-signer" agreement on a car whereby you are signing that you will be responsible to pay the bills if the resident and/or their estate cannot pay.

As stated above, I would also ascertain what the consequences are for missed or late payments to the facility as well as violations of their rules.

Q: Is it worthwhile to try negotiating the terms of an assisted living contract?

Ms. Chin: I don't know how much room there is for negotiation. I think the better option would be to look at multiple assisted living facilities and compare their services and prices to see which facility best suits your needs. Certainly you can pay higher prices for more services at each facility, but this is not really a negotiation.

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Q: Are there specific terms you want to be sure are written in the documents?

Ms. Chin: The specific terms I would think are most crucial are with regard to medical treatment and personal needs of the resident. You should be very clear on the level of medical attention and care that is provided at the facility as well as how accessible medical care will be should any need arise. There are also important personal concerns, which should be respected such as dietary/religious/social preferences. The facility should have the flexibility to accommodate the resident's ability to continue to practice their beliefs and to exercise the level of privacy to which they are comfortable.

Q: What is something that most people may not think about when reviewing or signing an assisted living contract?

Ms. Chin: This is a legally binding contract. You are exchanging a fee for a service. Thus, you have to pay on time and follow the facility's rules or there will be consequences like being asked to leave if you breach this contract.

Reviewed December 2017

Take the Next Step:

  • Compare contracts from various assisted living facilities. Decide if you'll want a lawyer to review those contracts for you.
  • Find out how to protect a parent's finances who is in assisted living.
  • Need legal advice? Visit NOLO today for your legal needs.
  • Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
  • Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.

Renee Linares Chin Esq. is an attorney who regularly blogs about personal finances and estate planning topics. Visit her on Twitter at @renelinareschin and on her website at

Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.

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