The Parent Trap You Didn’t Expect

Some are calling it a sleeping giant – one that could drive more people to consider long-term care planning to avoid creating a debt burden for their kids. If you’ve never heard of filial responsibility laws, now’s the time to get familiar. Failure to do so could lead to some unexpected financial consequences in certain cases.

What are Filial Laws?

Filial responsibility laws -- on the books in 29 states and Puerto Rico but NOT in Michigan – make it possible for children to be held legally responsible for the long-term-care expenses of their parents, including nursing home bills. A 2012 case in Pennsylvania demonstrates the potential for a devastating outcome. In Retirement Corporation of America v. Pittas, the court found a woman’s son responsible for her $93,000 nursing home bill following her rehabilitation after a car crash.

For those of you with parents living in a state with filial laws, it’s important to understand how and whether the law could affect you and/or your siblings. While enforcement has been rare, Charlie Douglas, a board member of the National Association of Estate Planner and Councils, told InvestmentNews recently that it could be just a matter of time before states begin enforcing them more regularly. In Douglas’s words, “It could be a sleeping giant.”

With health care costs on the rise and increased deficits tied to Medicaid outlays, some advisers predict that states could start to enforce their filial laws to recover lost revenue. In any case, it pays to be prepared.

Learn How Filial Responsibility Laws Could Affect You

To understand your potential responsibility, I recommend beginning with three steps. First, talk to your parents about their long-term-care plans, and how they intend to pay for them. (A good resource to aid in the discussion is -- a website by the U.S. Department of Health and Human Services.) Second, investigate the filial laws in the state where your parent(s) live. You may need to consult an attorney to fully understand some of the laws’ implications. Explain the law to your family and work with them – and your adviser – to develop an appropriate plan. Third, examine carefully any nursing home or care facility contracts before signing, to learn what your responsibilities are in the event of non-payment by your parent.

Being a good financial steward sometimes requires planning for more than just yourself and your children. Avoid this potential “parent trap” by understanding how Mom and Dad’s end-of-life care could affect your financial plan. If you need assistance, AMDG Financial is ready to help. Please feel free to contact us with any questions.

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