Taking care of aging parents is something you may need to plan for, especially if you think one or both of them might need long-term care. One thing you may not know is that some states have filial responsibility laws that require adult children to help financially with the cost of nursing home care. Whether these laws affect you or not depends largely on where you live and what financial resources your parents have to cover long-term care. But it’s important to understand how these laws work to avoid any financial surprises as your parent ages. You can work with a financial advisor to help plan out your parent’s finances to make sure they have enough money on hand for the unexpected.
Do Family Members Have to Pay Bills That the Elderly Can’t?
The matter of filial responsibility is becoming increasingly pertinent as the population ages and a growing cohort of Americans needs elder care, whether for physical issues or dementia. The outcome of litigation between children of the elderly and nursing homes caring for their parents depends on each state’s own filial responsibility laws as well as Medicaid policies and its estate recovery program.
The state you reside in determines whether or not an adult child is responsible for their parent’s medical bills when the parent is unable to pay. Before diving into the details, it should be noted that many of these laws have not been relied on for a number of years. This was more of an issue before medicare and social security benefits became more universal. However, many believe that as the baby boomer generation gets older these laws will become very important to understand again.
Definition of Filial Responsibility Laws
Filial responsibility laws are legal rules that hold adult children financially responsible for their parents’ medical care when parents are unable to pay. These laws typically only take into account who is able to pay the debt and do not necessarily divide the payment responsibility evenly. Thirty U.S. states have some type of filial support or responsibility law, including:
- New Hampshire
- New Jersey
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
Puerto Rico also has laws regarding filial responsibility. Broadly speaking, these laws require adult children to help pay for things like medical care and basic needs when a parent is impoverished. But the way the laws are applied can vary from state to state. For example, some states may include mental health treatment as a situation requiring children to pay while others don’t. States can also place time limitations on how long adult children are required to pay.
When Do Filial Responsibility Laws Apply?
If you live in a state that has filial responsibility guidelines on the books, it’s important to understand when those laws can be applied.
Generally, you may have an obligation to pay for your parent’s medical care if all of the following apply:
- One or both parents are receiving some type of state government-sponsored financial support to help pay for food, housing, utilities or other expenses
- One or both parents has nursing home bills they can’t pay
- One or both parents qualifies for indigent status, which means their Social Security benefits don’t cover their expenses
- One or both parents are ineligible for Medicaid help to pay for long-term care
- It’s established that you have the ability to pay outstanding nursing home bills
If you live in a state with filial responsibility laws, it’s possible that the nursing home providing care to one or both of your parents could come after you personally to collect on any outstanding bills owed. This means the nursing home would have to sue you in small claims court.
If the lawsuit is successful, the nursing home would then be able to take additional collection actions against you. That might include garnishing your wages or levying your bank account, depending on what your state allows.
Whether you’re actually subject to any of those actions or a lawsuit depends on whether the nursing home or care provider believes that you have the ability to pay. If you’re sued by a nursing home, you may be able to avoid further collection actions if you can show that because of your income, liabilities or other circumstances, you’re not able to pay any medical bills owed by your parents.
Filial Responsibility Laws and Medicaid
While Medicare does not pay for long-term care expenses, Medicaid can. Medicaid eligibility guidelines vary from state to state but generally, aging seniors need to be income- and asset-eligible to qualify. If your aging parents are able to get Medicaid to help pay for long-term care, then filial responsibility laws don’t apply. Instead, Medicaid can pay for long-term care costs.
There is, however, a potential wrinkle to be aware of. Medicaid estate recovery laws allow nursing homes and long-term care providers to seek reimbursement for long-term care costs from the deceased person’s estate. This can include the recovery of funds from a recipient’s home, bank accounts and other assets. And, if your parents transferred assets to a trust, then your state’s Medicaid program may be also able to recover funds from the trust.
You wouldn’t have to worry about being sued personally in that case. But if your parents used a trust as part of their estate plan, any Medicaid recovery efforts could shrink the pool of assets you stand to inherit.
Talk to Your Parents About Estate Planning and Long-Term Care
If you live in a state with filial responsibility laws (or even if you don’t), it’s important to have an ongoing conversation with your parents about estate planning, end-of-life care and where that fits into your financial plans.
You can start with the basics and discuss what kind of care your parents expect to need and to who they want to provide it to. For example, they may want or expect you to care for them in your home or be allowed to stay in their own home with the help of a nursing aide. If that’s the case, it’s important to discuss whether that’s feasible financially.
If you believe that a nursing home stay is likely then you may want to talk to them about purchasing long-term care insurance or a hybrid life insurance policy that includes long-term care coverage. A hybrid policy can help pay for long-term care if needed and leave a death benefit for you (and your siblings if you have them) if your parents don’t require nursing home care.
Speaking of siblings, you may also want to discuss shared responsibility for caregiving, financial or otherwise, if you have brothers and sisters. This can help prevent resentment from arising later if one of you is taking on more of the financial or emotional burdens associated with caring for aging parents.
If your parents took out a reverse mortgage to provide income in retirement, it’s also important to discuss the implications of moving to a nursing home. Reverse mortgages generally must be repaid in full if long-term care means moving out of the home. In that instance, you may have to sell the home to repay a reverse mortgage.
Filial responsibility laws could hold you responsible for your parent’s medical bills if they’re unable to pay what’s owed. If you live in a state that has these laws, it’s important to know when you may be subject to them. Helping your parents to plan ahead financially for long-term needs can help reduce the possibility of you being on the hook for nursing care costs unexpectedly.
Tips for Estate Planning
- Consider talking to a financial advisor about what filial responsibility laws could mean for you if you live in a state that enforces them. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When discussing financial planning with your parents, there are other things you may want to cover in addition to long-term care. For example, you might ask whether they’ve drafted a will yet or if they think they may need a trust for Medicaid planning. Helping them to draft an advance healthcare directive and a power of attorney can ensure that you or another family member has the authority to make medical and financial decisions on your parent’s behalf if they’re unable to do so.
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