Going After Kids for Parents' Care Costs

(Image credit: shapecharge)

When an older adult racks up unpaid long-term care bills, who's responsible for paying the debt? In a growing number of cases, adult children are being held legally responsible for their parents' nursing-home or other care expenses. The reason: More than half of U.S. states have "filial responsibility" laws obligating adult children to financially support their parents.

4 Secrets to Buying Long-Term-Care Insurance

State filial-responsibility laws can be traced back to 16th century English "Poor Laws," which created an obligation for financially able family members to support indigent relatives as an alternative to the newly established public welfare system, Pearson says. At one time, nearly all U.S. states had such laws. But starting in the 1960s, when Medicaid became a safety net for people who couldn’t afford care, some of the laws were repealed—and those that survived were largely ignored.

But that has changed in recent years as more seniors are living for many years with dementia or other chronic conditions, requiring costly long-term care. Ideally, a senior who is running out of money and has no other resources would make a timely application for Medicaid, and filial-support laws would never come into play. But it doesn't always work out that way. In some cases, seniors don't apply for Medicaid on time, or they're disqualified because they made gifts to their children before applying. If there's any coverage gap, large unpaid bills can accumulate quickly.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Who Might Sue

While the laws vary from state to state, they generally apply only when the parent is indigent and the adult child has some ability to pay. In many states, the laws won't apply if the child can prove that the parent abandoned or abused him. If the parent and child live in different states, courts will typically apply the filial-support law of the state where the parent lives.

Tactics to Make Long-Term-Care Coverage Affordable

Depending on the state, filial-responsibility lawsuits may be filed by a parent or other family member or by a third party, such as a long-term-care facility, that has an interest in the individual's care. In some filial-responsibility cases, siblings are suing each other. In a case decided in Pennsylvania last year, a son who was caring for his elderly mother at home successfully sued his brother for filial support.

To minimize your odds of being saddled with a parent's care costs, have open family discussions about long-term-care planning and understand the Medicaid rules, says K. Gabriel Heiser, a retired elder law attorney and expert on Medicaid planning. Seniors who give away assets within five years of applying for Medicaid generally trigger a period of ineligibility for benefits.

When reading nursing-home admissions contracts, watch out for any provisions asking for a financial "guarantor" or "responsible party." Federal law prohibits nursing homes from requiring a third-party guarantee of payment as a condition of admission—but some facilities still try to get family members to voluntarily agree to pay the bills.

Options for Dealing With Rising Long-Term-Care Insurance Premiums

Laise covers retirement issues ranging from income investing and pension plans to long-term care and estate planning. She joined Kiplinger in 2011 from the Wall Street Journal, where as a staff reporter she covered mutual funds, retirement plans and other personal finance topics. Laise was previously a senior writer at SmartMoney magazine. She started her journalism career at Bloomberg Personal Finance magazine and holds a BA in English from Columbia University.