With the demographically large baby boomer generation moving into retirement, we may see an increasing number of people without the financial resources to support themselves in their golden years. What if these “retirees” do not have the financial resources to pay for the cost of health care, long-term care, or nursing care?
As we discussed in our July 2, 2012 post, YOU may be liable for your relatives’ unpaid bills.
How is this possible? You can become liable for the health care bills of your family members due to filial laws. This law requires spouses, children and even parents of needy adults to support indigent family members. Although many states (approximately 29) have filial laws, they are rarely used today with the exception of one state . . . Pennsylvania. The PA filial law has been on the books since 1771 and PA Act 43 of 2005 resurrected the old filial laws.
Nursing homes have been successfully using the filial laws to sue adult children for their parents’ past due bills. As we discussed in 2012, Health Care & Retirement Corp. of America (HCR) sued John Pittas for nearly $93,000 to pay for his mother’s nursing home past-due bills. Mr. Pittas was not a party to the nursing home contract and was not accused of any wrong-doing. HCA won the suit because he was his mother’s son and had the income to pay. Mr. Pittas appealed to the Superior Court of PA, but the decision in favor of HCR was not overturned. The PA Supreme Court refused to hear the case, thus upholding the lower court’s decision.
Thus if you have a relative in assisted living, nursing home, etc. who may be unable to pay their bills, you should consult with an elder care attorney. We understand that there are exceptions to this fiscal responsibility, such as the individual does not have sufficient financial resources to support the indigent close relative or if an adult child was abandoned or abused as a minor child. It may also be possible to escape the filial laws once the indigent person qualifies for Medicaid. In such a situation, it would be prudent to assist that family member to be covered by Medicaid ASAP.
It may also be prudent to purchase long-term care insurance until the family member qualifies for Medicaid.
If you find yourself in this situation, it just may be the opportune time to schedule a meeting with an elder law attorney, a long-term care insurance agent, and your tax professional.
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.