Let’s face it: we’re living in an aging society. Younger generations are shouldering the economic burden of their elders, and with this comes financial obligations to plan for. This is something that recurs with each passing generation, but the fiscal weight is particularly heavy on Millennials and Generation X today. This is because the size of the aging population is the largest in U.S. history thus far.
One would hope that their parents and grandparents have the funding to cover the cost of their own retirement and healthcare. However, some do not and require help from their loved ones. While you may voluntarily elect to help out, what you might not know is that you could be held legally liable for your parents’ necessities of life. Keep reading to understand how filial responsibility laws may hold you personally responsible for paying your parent’s bills, and how to better plan for the unexpected.
What is a Filial Responsibility?
Filial responsibility is a term describing an adult child’s legal duty to financially support a parent, or parents, who are in need and do not have the resources to pay for life necessities. Many states have filial responsibility laws that apply when an indigent or infirm individual doesn’t have the means to pay for their own care, but has an adult child that does. In these cases, the adult child is considered fiscally responsible for their parents’ unpaid bills. For instance, nursing homes and long-term care facilities will seek reimbursement for their patients’ unpaid balances through these laws.
These laws typically do not impact lower- to middle-income households that qualify for Medicaid. However, there are still scenarios in which expenses are incurred before the parent qualifies for Medicaid and the adult child or children are determined to have the financial resources to pay for care costs.
When Does Filial Responsibility Come Into Play?
A little over half of U.S. states have laws relating to the enforcement of filial responsibility. (Find out if you live in a state with filial responsibility laws here.)
If you live in a state with filial responsibility laws, then it’s important to understand when these laws might apply to you. Here are some general scenarios in which the law may require you to pay for your parent’s care:
At least one of your parents are on financial support provided by their state government that helps pay for their housing, utilities, food, and other day-to-day expenses
At least one of your parents are “indigent” which is a status in which Social Security benefits do not cover all of their expenses
At least one of your parents aren’t eligible for Medicaid, which helps to pay for long-term care
You have a parent who cannot pay their own care costs
You could be determined to have the financial resources to pay their unpaid care bills
Nursing homes located in states with filial responsibility laws have the means to pursue repayment through the adult children of their patients. If outstanding bills remain unpaid, and your parent(s) cannot pay them, then you may be sued by the nursing home in a small claims court.
The court case will determine whether you are financially liable for your parents through filial responsibility. The key determinants include your parent’s financial status and your own financial status. First the judge will verify that your parent is indigent or otherwise cannot pay for their own bills (including death). Then, they will determine whether you have the financial resources available to pay for any outstanding bills. If the lawsuit proves that you are in a place to pay these bills, the nursing home can take collection actions. Depending on your state’s guidelines, your wages may be garnished and your bank account may be levied. However, you could prevent collection activities if you can prove that you are unable to pay these bills.
Filial Responsibility & Medicaid - What You Need to Know
If your parents qualify for Medicaid, then you typically don’t have to worry about filial responsibility laws applying to you.
Medicare and Medicaid are two separate federal health insurance programs that aim to cover the health costs of those in need. Medicare mainly covers any individual over the age of 65, but it does not pay for long-term care expenses. Medicaid is a federal-state jointly funded program that covers the healthcare costs of low-income individuals of any age, and can pay for long-term care expenses. While the eligibility qualifications vary from state to state, seniors who qualify for Medicaid can have their long-term care costs covered. If your parents are able to enroll in Medicaid, you generally don’t have to worry about filial responsibility.
However, all parties should be wary that long-term care providers can seek recovery for unpaid costs through a deceased patient’s estate. These actions are permitted through Medicaid estate recovery laws. While the adult child will not be held personally liable through filial responsibility, Medicaid recovery can impact the value of the estate that you stand to inherit.
Filial Responsibility Example
Here is an example where filial responsibilities law could be applied in theory. Let us say that you have a mother who lived in a nursing care home for six months, where she received plentiful medical treatment. She racked up a bill of $100,000. Both of you live in the same state that has filial responsibility laws.
Your mother had applied for Medicaid assistance, but she was ultimately denied because of her pension income. However, because she doesn’t qualify for any government assistance, her pension is barely enough to cover her living expenses. Therefore, her nursing home bills are left unpaid.
The nursing home decides to sue you in the small claims court to recover their unpaid invoices, on the grounds of filial responsibility. The court analyzes your income, assets, debts, and personal circumstances and determines that you have the financial means to cover the bill. Therefore, the court rules that the nursing home may move forward with collection activities such that you will pay the bill.
This is just a theoretical example of how an adult child may be charged with filial responsibility. It highlights an issue in which there are growing long-term care and healthcare costs amongst our elderly who do not have the fiscal means to cover them. Sadly, this can sometimes mean that their children are left holding the short end of the stick.
Understand How Filial Responsibility Fits Into Your Estate Plan
This is just a theoretical example of how an adult child may be charged with filial responsibility. It highlights an issue in which there are growing long-term care and healthcare costs amongst our elderly who do not have the fiscal means to cover them. Sadly, this can sometimes mean that their children are left holding the short end of the stick.
It is imperative for every member of the family to understand how filial responsibility fits into their own Estate Plan. If you have children who will reach adult age by the time you will incur long-term care and nursing home costs, you will want to be wary that your provider can come after any unpaid bills. They can legally seek reimbursement through your estate when you pass away, which can significantly reduce the inheritance that you set aside for your child. Even worse, they can legally sue and recover these costs through your child if they have the financial means.
As an adult child of aging parents, you’ll also want to be aware about your possible filial responsibility. It is highly recommended to confirm whether you live in a state that allows filial responsibility, and if so, whether or not your parents are in the position to cover their own healthcare costs, whether through personal resources or Medicaid. If they do not, it should serve as a prompt to have a family discussion on how these costs should be covered.
Filial responsibility issues spark a conversation on how estate planning can be approached as a multigenerational strategy. Our personal circumstances and decision-making aren’t always in a vacuum; they often impact our loved ones in generations either above us or below us. Therefore, it is a great idea to make sure every adult family member has their own Estate Plan, along with a cohesive strategy on protecting each member’s assets and property for generations to come.
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