Let's talk today about a law that you might not know about but which could have big financial ramifications as our population continues to age.
Filial responsibility laws can hold children responsible for the cost of their parents' wellbeing including nursing or rehabilitative care. These laws are on the books in more than half of the US including Connecticut, Massachusetts and Rhode Island.
Most people don't realize the laws exist because the states haven't been enforcing them… until now.
As Medicaid funding is squeezed tighter and more cuts are made, filial responsibility laws could have devastating impacts on individuals and their financial future. Experts believe that the states will be increasing their enforcement of these laws, and in fact some States already have begun to do that.
Do you have a plan in place to cover mom or dad's nursing care?
Roots of These Laws
It is an old law with origins in the Elizabethan poor tax of 1601. They were enacted to hold children responsible for the care of their indigent elderly parents before there were social programs like Social Security.
Indigent is defined "having insufficient means to pay for their own care and maintenance... It includes, but is not limited to, those who are completely destitute and helpless."
“Filial support laws raise provocative questions about who should be responsible for costly eldercare. Families? Society at large? What about the individual’s own role in planning for long-term care needs?The growing numbers of older people, their increased longevity and increasing care costs continue to make those questions that much more pressing.”~ AARP
Adverse Judgments Could Be Financially Devastating
One case in Pennsylvania demonstrates the ramifications of an adverse judgement. In HCR vs Pittas (appeals finalized in 2013) the court found Pittas was liable for upwards of $92,000 in nursing home costs incurred by his mother while rehabilitating from an injury.
There were a number of articles published on the matter following the Pittas judgment but recently the news has been quiet on the topic.
Since it seems increasingly likely that filial obligations will be called into action, we think it is important to bring this topic back to the forefront before the states start pursuing funds.
Keep in mind that each State has different laws. Some even include criminal penalties for failure to provide support. Add to that the involvement of Medicaid and we are dealing with Federal laws as well. It isn’t a clear cut picture.
Remember that the relevant laws are those of the State where the parent resides and incurs the debt not where the child resides. States can reach across State lines to reach the child.
Put a Plan in Place to Cover the Costs of Care
According to the US Department of Health and Human Services, 70% of people over 50 will need some form of long term care. And increasingly that care is often the result of accidents, not illness.
Did you know that RI, MA and CT are among the most expensive places to enter into long term care?
Consequently the children of indigent elderly people in RI, MA, and CT stand to be on the hook for substantial sums.
We have written before about becoming informed healthcare consumers. Long Term Care is another area where we need increased understanding and more informed decision making.
Knowing more about the cost of care is a step in the right direction. Many people mistakenly expect the government to cover some or all of the cost of care. And most do not understand what long term care insurance covers.
The reality is that many of us have not taken steps towards planning for long term care expenses. We need to open up discussions on these costs and ways to fund them.
It’s Time to Start Having Difficult Conversations
Our goal is to get people talking. We want you to go to your parents, your neighbors, your friends and encourage everyone to discuss this matter with their financial advisor and a qualified elder law attorney.
And now is a good time to get the kids involved. All too often the children do not understand their parent’s financial situation. They mistakenly believe that their parents are more well off than they actually are. And for one reason or another, whether due to mismanagement or theft or other reasons, the parents are financially strapped in their later years.
We cannot blithely go on. We must start transparent conversations about finances and future facing planning.
Please contact a qualified elder law attorney who can advise parents on what you can do to protect your children and advise children on your rights and obligations. Your WD & Associates representative can also discuss potential ways to protect your assets using long term care insurance where it is feasible.
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