In this day and time, people are living much longer lifespans than previous generations. It is not unusual to see the elderly require some type of nursing home care, assisted living arrangement, or home health care. This long-term care arrangement can last for years and be extremely costly. Unfortunately, it is not unusual for the individual in a long-term care situation to eventually run out of money. Traditionally, when this happens, the service provider, along with the individual’s family, have turned to Medicaid to cover the costs. However, with the Medicaid system becoming more overburdened, service providers could begin to seek payment directly from the elderly’s children. This is where Filial Law comes into play.
Filial Law places a financial responsibility upon adult children for the support of their elderly parents or relatives who cannot pay for their own care. These laws obligate adult children to pay for their indigent parents/relatives basic needs such as food, clothing, shelter, and medical care. Should the children fail to provide adequately, Filial Law allows nursing homes and other long-term care facilities to bring legal action to seek reimbursement for unpaid bills. Adult children can even go to jail in some states if they fail to provide filial support.
Currently, thirty states have laws that can require adult children to be financially responsible for their parents' necessities when the parents no longer have the ability to pay them. These states are Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia.
Currently, very few people know about Filial Law, but there has been little enforcement of this law. However, according to Charlie Douglas, board member of the National Association of Estate Planner and Councils, filial laws “could be a sleeping giant” when it comes to recovering the cost of caring for the elderly. Douglas points to the findings of a recent court case in Pennsylvania. In Health Care & Retirement Corp. of America v. Pittas, the defendant was ordered to pay $93,000 to cover his mother's outstanding debt to a nursing home. Douglas adds, with the current cost of nursing home care in the United States running between $7,000 and $8,200/month, it is possible that filial law will be used more.
Given the current costs associated with long-term care, increasing life-spans, and possible legal ramifications, every retirement plan should include a provision for funding long-term care. An advisor working in cooperation with an elder care attorney can put together a plan to fund nursing home costs through a mixture of savings, investments, long-term care insurance, and family support.
Matt Dressel is the Owner of the Independent Financial Solutions Group, a Registered Investment Advisor. He is an Investment Advisor, Life & Disability Insurance Agent and does Financial Planning. He can be reached at 252-515-0242 or matthewdressel.ifsg@gmail.com. Securities are offered through Trade PMR, Member FINRA/SIPC. This article is not to be construed as legal advice.
