What happens to a resident's nursing home trust fund after death?

No, it absolutely DOES NOT go to the nursing home she was in.
Resident trust accounts are for the patient's needs that are not covered by the nursing home's care policy. Things like getting their hair cut or styles, having their finger/toe nails cut, men getting a shave, or women getting a manicure. Many nursing homes don't include toiletries like soap, shampoo, toothpaste, lotions, toilet paper, etc... These things have to be privately paid for by a resident trust account. That is what it is for.
Whoever is executor of your aunt's estate needs to go down to the probate court in her town and file a claims lawsuit with them to recover the money that the nursing home blatantly stole from your family. The nursing home is right about POA discontinues after a person's death. The executor of your aunt's estate has a right to demand an itemized bill for every service and necessity the nursing home billed the resident's trust account. That is your right. $2,000 is a lot of hand lotion and kleenex. If they won't give this to you, the court will order it. Don't let that stop you. If your area has an Ombudsman's office or APS is available talk to them. The nursing home refusing to turn over that money is financial elder abuse and theft.
The nursing home tried to pull this crap on me with my parent's resident trust account. I only allowed $300 to be in it and that was too much to trust them with. They paid it to me because I made a lot of noise about it. You must do the same. Do whatever it takes so they don't get away with robbing yet anther family of money that they do not owe.

Here is updated info. This is in NJ but since Medicaid is Federally funded I would think these rules of PNA accts exist in every state. Scroll down to #14 and you will see how the NH is to handle the acct. I did exactly what it says and had a check within a couple of weeks from the NHs corporate.

The POA is no longer in effect at death. The Executor is now in charge that person would get a short certificate from Probate. If no Executor than someone needs to go to Probate and ask for a Short Certificate to handle the deceased finances. There will be a fee. This is what needs to be presented to the NH to receive the money.

As you will read the NH is not entitled to the money even if they can't find a family member.

A nursing home resident trust account, or resident in-house account is kind of like when people in prison have a commissary account. It's money set aside to cover things that the nursing home does not offer. Like haircuts, getting finger nails and toe nails cut, manicures for women, a shave and trim for men. Many nursing homes do not supply their residents with personal items like soap, lotion, shampoo, toothpaste, etc... the family has to put money into the resident trust account or the resident has to themselves or they don't get these things.
That money does not belong to the nursing home or assisted living facility. When a resident leaves the nursing home like if they pass away or are moved to a different one, the money not used in their account gets refunded.

I have no idea what a "Nursing Home Trust Fund" is. I hope others here do, and can tell you. My brother was in Assisted Living. We paid his costs monthly out of his Trust Account. I paid, as his POA. They are correct that POA ends with death. It now becomes the Executor of the Will or the Trustee of the Trust who gathers and distributes the estate. If these "funds" of your Aunt's belonged to her then they should belong to her estate. If, however, she was on medicaid of other government assistance, her funds may go to those programs.
Given I don't understand what a nursing home trust fund is, or whose money is in it, I will hope others can answer anything other than the POA.

This is not true. The PNA becomes part of the persons estate. As does the money left after spend down.

Here is the site that I found. Its from 1999 but I don't think things have changed that much. Call your local Dept of Social Services and run it by them.

https://www.cga.ct.gov/PS99/rpt%5Colr%5Chtm/99-R-0025.htm

There would only be a personal needs allowance if resident were on Medicaid.

Yes, the funds remaining in the account should be returned to the executor.

In California, my brother-in-law lived in a SNF for a few years, and had a small sum built up in his fund. When the first round of stimulus checks went out, he suddenly had an additional $1200. The SNF social worker called me to let me know it was there, and wanted to know if the family wanted to direct the money to a particular purpose. I told her we'd like it to go for final expenses, and planned to buy a prepaid cremation policy. She said to have the contract written and give a copy to the office manager, who would send a check to the mortuary. BIL had a hospital stay shortly after, went on Hospice and transferred to another SNF owned by the same company. When he passed, I contacted the office manager and between the two facilities, they got a check out to us for the entire balance of his fund. (We had paid the cremation with a credit card, as it had to be done right away.)

Some of the confusing part is that the NH Trust Account is NOT what most folks think of as a true “Trust”. Its basically an in-house cash account the NH has for residents to use to cover smaller charges (the classic is for paying for services from the on premises beauty shoppe) or for the resident or their POA or other designated individuals to be able to go to the NH business office and withdraw cash from the account to buy clothing or toiletries. The $ in the Trust account can come from the Medicaid PNA personal needs allowance or is $ that their DPOA or family puts in.

There may not be any $ left in the account. Problem is how to find out.

In theory NH should provide a statement to resident or their DPOA on the account every 90 days & pay smallish interest. My moms IL did but her first NH did neither; her second NH did both & religiously. My MIL first NH did & sent out reminders if the account was getting under $25; her other NHs did not send anything. It’s a crapshoot & ripe for sketchiness. MIL went into NH & onto Medicaid before my mom, so I was ready for PNA misuse nonsense when my mom eventually too went into a facility (NH was not rep payee). What I found in looking at NH was that many bill for cable &/or phone and it is magically !!! the exact amount of the PNA; and that this lil missive was glossed over as a perk for Medicaid residents if the NH was the rep payee. So IF your elder was having NH be their representative payee for their SS $ or other retirment income, NH places whatever your state has as the set PNA as a monthly deposit in the Trust (PNA tend to run $50 or $60 a mo.) but it gets spend out each month to pay cable & phone costs.

Now a better NH, doesnt do this BUT if they are getting twice a mo. wash & set, those 2 visits could use up PNA in full each month. Or if NH does an outing each month that elder went on, $10-$15 for the outing gets deducted. So that + beauty shoppe could use all PNA.

if NH gets PNA and there’s no beauty shoppe, etc and the PNA was building $50/$60 or more ea mo, that is a BIG issue for their medicaid eligibility. Medicaid has 2k as asset maximum. If the PNA goes above 2k it can jeapordize Medicaid. Based on what folks have posted on this site, what happens is NH gets verbal ok from resident & does a large purchase for the resident, like wheelchair or speciality walker, to get the PNA way below 2k. If that happened, there may be no or little $ left.

If there is $ left, it is as others have said, an asset of the Estate. My moms NH sent me personally a check for the balance (small under $200) which I deposited into the account I was using for probate. If that had not happened, it would fall to the Executor of the Estate to request the $ in writing to the NH or their corporate HQ.

one issue is that often for Medicaid residents, there’s nothing left to warrant ever opening probate & getting an Executor named who has authority to do the letter. So $ is in limbo. What should happen is the NH turns the $ over to the State unclaimed property division and it sits there for a yr or two. Eventually state publishes a list in the newspaper and if you are a heir, you file to claim the $.

I’d suggest that you try to get an accounting of the PNA to see if in fact there actually was over 2k there. If she was on Medicaid, again, the NH probably did some sort of big $ spend so that her Medicaid wasn’t jeapordized, so PNA balance could be quite small. Good luck in your quest.

The question is addressed in item #7 in this agingcare article:

https://www.agingcare.com/articles/things-to-know-about-nursing-home-trust-funds-162627.htm

There are other items of interest, for those who may need to move a LO to a NH. For instance, Medicaid or not, NO account must be set up. It's a choice, a benefit for the resident if they have capability to pay for whatever they want or need.

Given what I've read in this article, I would likely NOT set up a "fund" with any NH. IF there were no local family to assist the resident, maybe, but in that case it might be better to find a local NH!

NOTE for OP and others:

When they pass, any funds sent *should* be made out to the "estate of" the person. I am hoping the checks sent to me won't be a problem, once probate gets around to appointing me (per the will) as executor, as they are made out to HER not the estate of. Meanwhile, I have to sit on these checks as I can't open an Estate Account before being appointed. I do have the Estate TIN, but am in a holding pattern. We wouldn't have had to do probate, except for the MC deposit refund + interest, stimulus check and probable tax refund.

If any of you need these funds for a burial, you are likely going to have to find a way to cover the cost up front and get reimbursed later. Special circumstances may apply, but it will be up to probate to approve. Each state may have different rules, but the documentation I read while applying for probate says the funds have to remain in the account for 6 months! I suspect this is because there might be bills that come in after the fact, which will need to be paid.

The best thing you can do for your LOs who have to move to NH is try to set up a pre-paid burial account. Many can be done paid in full or with regular payments. Actually, this would be beneficial for ANYONE, not just NH residents. It would be especially true for those who have to spend down to get on Medicaid. A burial plan IS considered a legitimate spend down expense. Having this set up well before the need is really helpful. Thankfully my mother set hers up when she set up one for dad. He passed not too long after, and I recall a check made out to the FH for over $2300. In her case, the interest accruing seems to have brought her to a point where we should owe nothing. I only had to let them know she passed and sign an Authorization form for the cremation. burial with dad pending NICER WEATHER!!!

The last thing you need on the death of a LO is to have to scramble to find a FH, make decisions about this, that and the other, find the $ to cover all that and/or have to battle with other family members over the method or details!

This pre-plan is also helpful when there might be contention between family members about the burial method. A recent post questioned this as the mother's will stipulated cremation, but the OPs brother was contesting. It depends on state rules, but generally the spouse, if living, has primary say. If the spouse isn't living, the children have a say (my state docs say ALL children must sign, but only I was required to sign it, probably because mom had it all set up.) It appears there is some kind of industry wide rule that if YOU sign your own wishes, they keep it on file and they do what YOU want, not what spouse or kiddos want! I think in our case they just needed someone's John Hancock on the paperwork, because mom had that set up long ago! While putting it into a will, as that OP's mother did, may reinforce her wishes, wills can be misplaced or found/read too late. Best to make your wishes known to the ones who may be handling your last wishes.

Even if on Medicaid, every individual in a NH has a PNA. If someone has $0 income (I.e. no SSA, pension, VA), he/she will be signed up for an SSI benefit of $50. This money belongs to the individual so that they have access to soap, shampoo, socks, slippers, haircuts,etc.