Could Your Children Be on the Hook?

Some retirees who don’t have long-term care insurance or adequate savings to cover an extended stay in a care facility might be jeopardizing their children’s future financial well-being. Twenty-nine states have archaic, filial responsibility laws on the books. Although rarely enforced, these laws can hold grown children responsible for impoverished parents’ financial support, and in some cases, medical and long-term care expenses. A small number of states even extend this responsibility to grandchildren.

The states that still have these little-known laws are: 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 and West Virginia.

Up to this point, most judgments holding children responsible for parents’ long-term care have been tied to fraudulently transferring a parent’s wealth to a child in order to qualify for Medicaid. However, there has been at least one case that held a child liable without any evidence of wrongdoing. In 2012, a Pennsylvania appeals court ordered an adult son to pay his mother’s $93,000 nursing home bill after she moved out of the country. The court based its decision on the state’s filial responsibility law and the son’s ability to pay.

As financial pressures mount from growing longevity, long-term care costs and government deficits, some observers wonder if more states and nursing homes will turn to these laws to recoup their losses. Of course, children can hire an attorney if that happens. Defenses include an inability to pay or parental neglect or abuse during the child’s youth. But sharing joint property or accounts can increase a child’s liability. And children should be extremely careful not to sign a care facility’s admittance contract that makes them responsible for unpaid bills.

We are committed to helping you protect yourself and your family against the financial risks associated with long-term care. Creating a comprehensive retirement plan includes planning ahead for all long-term care expenses. Call Jordan Dechtman, Centennial, CO financial planner at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website www.JordanDechtman.com to review your retirement plan and discuss the importance of planning for long-term care.