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WALSH & ASSOCIATES BLOG

Wednesday, 15 June 2016 19:32

Filial Responsibility Laws Could Leave You with Your Parents’ Debt

Though relatively unknown, there’s a law on the books that could put adult children in a situation that jeopardizes their savings. If your parents live in one of 29 states or Puerto Rico that has filial responsibility laws, you could be held legally responsible for their care. That means should your parents not have the financial resources to take care of themselves, you get to foot the bill. While filial responsibility laws are rarely enforced today, longer life expectancies and the threat of elderly parents outliving their savings could bring these laws back to life.

States with Filial Responsibility Laws

The states that still have filial support laws are the following:  

Alaska Kentucky New Jersey Tennessee
Arkansas Louisiana North Carolina Utah
California Maryland North Dakota Vermont
Connecticut Massachusetts Ohio Virginia
Delaware Mississippi Oregon West Virginia
Georgia Montana Pennsylvania  
Indiana Nevada Rhode Island Puerto Rico
Iowa New Hampshire South Dakota  

 

Filial laws stem from England’s 16th century Poor Laws, and at one point 45 U.S. states had statutes that left children responsible for the well-being of their parents1.  While some states repealed these laws, others have left them dormant on the books.

Medicaid Expenses

While Medicaid currently helps the elderly who have exhausted their assets cover their long-term care expenses, the rising costs of long-term care have some worried that it will not be enough and could bring filial laws back into play. Nursing homes and health-care providers will need a way to ensure that they are paid, and laws that make children responsible for their parent’s bills could be the way to do it. With the average semi-private room in a nursing home costing $6,235 a month (as of 2010)2, these are no small bills!

What Happens if You are Unable to Pay

Filial responsibility laws vary from state to state, some imposing financial responsibility, others have criminal penalties. No matter what the state though, all require the parent to be deemed “indigent” or “unable to provide their own support.”

In 2012, the Pennsylvania Superior Court upheld a lower court’s ruling to require an elderly woman’s adult son, John Pittas, to pay her $93,000 nursing home bill after she left the country with her bill unpaid. While there had been other cases in different states that required children to pay their parents bills, there were generally findings that the adult children had made efforts to illegally hide their parents’ assets. The previously mentioned Pennsylvania case is particularly significant because there had been no evidence that John had engaged in any illegal transfer of assets.

Planning Ahead

Though not an imminent threat, these filial support laws should make you think about how much financial support you are able to offer your parents should the need arise. While many adult children would do anything it takes to support their elderly parents, they may end up putting their own children in jeopardy of having to support them – thus creating a dangerous cycle.

We highly encourage you to seek the advice of your financial advisor to help you find the balance of saving for both your parents’ and your own future. We can hope that government welfare programs will keep filial support laws from coming into play, but worst comes to worst, filial responsibility should be kept in mind as a possible scenario when planning long-term care strategies with your family.

At Walsh & Associates, a registered financial planner and investment advisor, we’re here to help your family navigate through the financial obstacles you and your family may face. If you’re concerned about your parents’ or your own financial welfare, and are looking for guidance, we welcome you to contact us.

 


1. http://www.forbes.com/sites/northwesternmutual/2014/02/03/who-will-pay-for-moms-or-dads-nursing-home-bill-filial-support-laws-and-long-term-care/#7aca60f55620      

2.  http://longtermcare.gov/costs-how-to-pay/costs-of-care/  

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