Hopefully, your parents have saved, invested, and managed their money well enough to provide for themselves as they continue into old age. We encourage you to have these discussions with your parents, either jointly or separately. If either or both of your parents end up in dire financial straits, the burden of rescuing them could fall on your shoulders. That is because twenty-nine states have filial responsibility laws.
Nursing homes may begin turning to these statutes to demand payment of eldercare bills. These laws can be challenged in court, but children may have little recourse. In 2012, the Superior Court of Pennsylvania upheld a lower court ruling requiring a man to pay off a $93,000 long-term care bill owed by his mother to a nursing home. In August 2015, the same state court upheld a ruling that a man had to pay his mother $400 a month in filial support. Fortunately, some filial laws do offer loopholes. In Pennsylvania, for example, children cannot be held legally responsible under the state filial law if their parent abandoned them for a decade or longer during their childhood or if the parent’s immediate family is incapable of paying the debt.
In order to cite filial responsibility laws, the nursing home or assisted living facility usually has to provide proof that the resident cannot pay the cost of care. That hurdle may not deter eldercare providers as baby boomers continue aging. Providers may be forced to explore every possible avenue to collect the payments that will keep them in business.
Medicaid If the applicant is already eligible for Medicaid prior to requesting coverage, that coverage can be retroactive up to three months from its starting date. Medicaid does have its potential downside. By law, state Medicaid programs must try to collect reimbursement for coverage of eldercare costs after a Medicaid recipient passes away. While the value of a car and a home have no effect on someone’s eligibility for Medicaid, that home and car can be claimed by the state as it seeks to recoup its costs. An estate is usually spared from this effort if the deceased person leaves behind a surviving spouse, children under 21, or disabled or blind children of any age. Property held in a trust should also be exempt.
Additionally, if you & your parent(s) jointly own assets or accounts, that could be a problem. For example, you and your parent jointly own a townhome. If you attempt to sell it after your parent’s death while the state is trying to recoup Medicaid costs, the state may place a lien on it. You will have to give up some of the sale proceeds to settle the lien.
Filial laws currently are in place in Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, and Puerto Rico.
Our firm is dedicated to helping seniors and their loved ones work through issues and implement sound legal planning to address them. If we can help in any way, please don’t hesitate to contact our office at (630) 221-1755.