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In some states, Medicaid will pay for assisted living - under certain circumstances - but in many it will not, so even if the person in assisted living is on Medicaid, likely private money would pay the bill. I'd suggest that you get this all ironed out before you move anyone to AL. Good luck,
Secondly, what are the terms of each document? That's where the authority to act will be found.
I just checked my father's Living Will (health care proxy, patient advocate document). It creates authority only for medical decisions and treatment. There is no authorization for financial authority or placements.
If I ever needed to sign a contract on his behalf (other than a DNR order or for medical treatment), I would have to invokve the Durable POA.
However, these documents were drafted by a well known elder law, tax and estate planning attorney, for whom I worked periodically. The firm is one with a very good reputation; their estate planning and elder law department is top notch.
Since posting here I've become aware of the use by others of online forms. Given that these are boilerplate forms (which I've never read as I would never use one), I can't really guess what terms might be included, if the documents of which you speak happened to be boilerplate online forms.
Generally speaking, the Durable Power of Attorney grants the legal and financial authority while the Living Will (or medical power of attorney) addresses medical treatment.
As to who is responsible for the bill when the patient doens't have sufficient funds, I would think generally the individual who signed the contract with the facility.
However, you should read the contract very carefully to see if there are any other provisions for this situation.
Sounds like someone didn't do his/her research before acting.