Nursing Home Admission Agreements: How Facilities Use Contracts to Shift Risk — Lessons from a Recent Iowa Case

Nursing homes are increasingly deploying carefully drafted written agreements to protect their financial and legal interests. These documents often go far beyond standard admission paperwork. Facilities include provisions designed to:

• Create or strengthen filial responsibility obligations, potentially making adult children personally liable for a parent’s unpaid care costs.
• Limit liability for care incidents, falls, neglect, or other adverse outcomes through arbitration clauses, damage caps, or waivers.
• Channel disputes away from courtrooms and into private arbitration, which is often more favorable to the facility.

A recent decision from the Iowa Supreme Court highlights both the power of these agreements and the growing uncertainty families face when challenging them.
In Cole v. Arbor Court Healthcare, LLC, a nursing home resident signed an arbitration agreement shortly before her death. Her husband sued the facility for negligence, gross negligence, wrongful death, and dependent adult abuse. The nursing home initially litigated the case aggressively for months, including participating in pre-trial discovery,  before attempting to compel arbitration.
Her husband opposed the motion, asserting that it was procedurally unconscionable and that the nursing home had waived its contractual right to arbitration. The district court granted the nursing home's motion for arbitration. The Iowa Supreme Court granted the husband's motion for an interlocutory appeal.
The Iowa Supreme Court ruled in favor of the husband on key points:

• The nursing home waived its contractual right to arbitrate by its conduct (continuing to litigate for seven months after the plaintiff refused arbitration).
• Iowa’s previous arbitration-specific waiver test (which required the opposing party to show prejudice) was preempted by the Federal Arbitration Act (FAA). The court followed the U.S. Supreme Court’s decision in Morgan v. Sundance, Inc. (2022), applying ordinary contract waiver principles instead of special rules that favored arbitration.

This case perfectly illustrates the preemption uncertainty now common in long-term care litigation. Iowa’s own state-law protections and procedural rules no longer apply in the same way when federal law (the FAA) governs. What families and their attorneys once relied upon under state law may be overridden, creating unpredictable outcomes depending on the specific facts, facility, and court.The Broader Trend: Facilities Protecting Themselves at Every Turn
Nursing homes routinely present families with multi-page admission packets containing:

• “Responsible party” or guarantor clauses that attempt to impose personal financial liability.
• Mandatory pre-dispute arbitration agreements.
• Releases or limitations on claims related to care quality.

While federal law (under the Nursing Home Reform Act) generally prohibits requiring third-party guarantees as a condition of admission, facilities continue to test the limits with cleverly worded language. When combined with arbitration clauses, these agreements can make it significantly harder for families to hold facilities accountable for substandard care.Bottom Line: Avoiding Institutional Care Is Still the Best Strategy
The increasing sophistication of nursing home admission agreements, coupled with federal preemption of state protections, creates real uncertainty for families. Even with favorable rulings like Cole, litigation is expensive, time-consuming, and unpredictable.
If it is medically and financially feasible, aging in place at home remains the safest and most controllable option.
Proactive elder law planning gives families far more protection and peace of mind than relying on nursing home contracts or hoping for a favorable court outcome after something goes wrong.Practical Steps for Families

• Never sign admission documents on the spot. Have them reviewed by an experienced attorney before signing.
• Explicitly cross out or reject any “responsible party” financial guarantee language and arbitration clauses when possible.
• Document all communications with the facility.
• Build a strong aging-in-place plan now: comprehensive advanced directives in trusts and powers of attorney, guardianship protections, home modifications when necessary, and family caregiving agreements.
• Consider long-term care insurance or hybrid policies as part of your overall strategy.
• Consider and re-evaluate Medicare choices to deploy, if possible, alternatives to institutional care.

We concentrate our practice on helping families avoid or minimize exposure to these institutional risks through thoughtful legal planning.
The regulatory and contractual reality of long-term care is increasingly complex and tilted toward the utilization and protection of institutional facilities. The best defense is preparation and planning to keep your loved one at home whenever possible.

Family Caregiving: The Powerful Key to Successful Aging in Place

Estate planning is about far more than deciding who gets the house, the investments, or the family heirlooms after you’re gone. True elder planning puts YOU first: your dignity, your independence, your quality of life, and your desire to remain in your own home for as long as possible.

A compelling new study from the MedStar Health Research Institute powerfully reinforces why proactive aging-in-place planning, supported by family or home caregiving, is one of the most important decisions you can make.

Groundbreaking Evidence: Caregiving Extends Life at Home

In a recent study of approximately 400 homebound seniors in Washington, D.C., researchers found remarkable results: older adults who had a family caregiver, a paid personal care aide, or both experienced a dramatically lower risk of death. 

Specifically, the presence of consistent caregiving support was associated with a 70% lower risk of death over the one- to two-year study period compared with those without such support. 

Aging in place isn’t just about comfort; it’s about survival. Home-based caregiving provides the monitoring, medication management, emotional support, and daily assistance that help seniors avoid the cascade of health declines that often lead to hospitalization, institutionalization, and demise.

Why This Matters for Aging-in-Place Planning

These findings reshape how we should think about estate planning and elder law. 

Traditional plans often focus heavily on asset distribution, beneficiary protections, and tax minimization. While those objectives remain important, the most impactful plans today prioritize living well at home.  In other words, if you take care of yourself first, you will be able to provide for others.  Good stewardship of your assets for your benefit means that, in the end, you have something to leave to others, in the form of tangible assets, peace of mind, and memories untarnished by avoidable stress, contests, and legal uncertainties. 

Effective aging-in-place strategies should include:

• Clear designation of family caregivers in your documents (e.g., healthcare proxies, durable powers of attorney, and advance directives);

• Funding mechanisms for home modifications, in-home care aides, and respite care;

• Legal tools like revocable living trusts that can seamlessly support ongoing home-based care without court intervention, protect assets from third-party control and management (guardianship protection), and empower families to facilitate aging in place by encouraging family caregiver agreements, care coordination, and proper asset management;

• Contingency planning that identifies backup caregivers and coordinates with professional services.

When you build these elements into your plan, you’re not just protecting assets, you’re protecting your ability to age safely and independently in the place you call home.  

The Broader Impact on Families

Family caregivers are the backbone of long-term care in America. By formally planning for their role, you reduce burnout, clarify responsibilities, and give your loved ones the legal and financial tools they need to support you effectively.

The MedStar study adds hard data to what many families already know intuitively: having a dedicated support system at home isn’t a luxury; it’s a life-extending necessity.

Take Action: Put “YOU” in Your Estate Plan

Don’t wait for a crisis. Work with an experienced elder law attorney to create or update your plan with aging-in-place as the central goal. This includes:

•  Reviewing your long-term care options and funding

•  Establishing clear caregiving roles and authority

•  Building flexibility into your documents for future needs

Your legacy isn’t just what you leave behind; it’s how you choose to live your final chapters.

The evidence is clear: investing in family-supported aging in place today can add meaningful, high-quality years to your life.