Monday, September 13, 2010

Are Children Liable for their Parent's Nursing Home Costs?

Written By: Attorney Jeffrey A. Marshall, CELA*  

Can children be held financially responsible for the cost of their parents' nursing home care? You might be surprised to learn that, in Pennsylvania, and many other states, the answer is yes.

Pennsylvania law has long provided that the husband, wife, child, father and mother shall, if of sufficient financial ability, care for and maintain, or financially assist an indigent relative. The statutory citation is 62 P.S. §1973.

Here is a Pennsylvania Appeals Court case that illustrates this potential for what is sometimes called "filial responsibility."

When Betty Budd died in 1999, she owed her nursing home $96,000. Betty's estate had no assets, so the nursing home sued Betty's daughter, Elizabeth for the money, based on Pennsylvania's filial responsibility statute.The Pennsylvania law, requires family members of sufficient means to support an indigent relative. It reads in pertinent part, as follows:
"(a) The husband, wife, child, father and mother of every indigent person, whether a public charge or not, shall, if of financial ability, care for and maintain, or financially assist, such indigent person at such rate as the court of the county, where such indigent person resides shall order or direct."

In essence, this law means that a child can be held liable for her parent's nursing home costs if three elements exist: (1) the parent is indigent; (2) the child has sufficient ability to support the parent; and (3) the child is not protected by some other law.

In Betty Budd's case, the first two elements were easy to prove. Elizabeth had used a power of attorney to transfer most of her mother's funds to herself. This made Betty indigent and also showed that Elizabeth had sufficient ability to support her.

However, the daughter's liability was not premised on the fact that she had transferred some of her mother's assets. Parents often make substantial gifts to their children before or during a nursing home stay and yet the children don't become personally liable for the cost of the parent's care. Why not? Because of the third element: the existence of another law that protects the children from financial responsibility; this protection arises from the federal Medicaid law.

Federal law provides that once a resident qualifies for Medicaid, a nursing home has to accept the Medicaid payments as payment in full for all covered services. They cannot go after the child.

In the Budd case, Elizabeth talked to the County Assistance Office, but she never took the actions needed for her mother to qualify for Medicaid. Although Elizabeth transferred some of her mother's funds, that only made Betty ineligible for Medicaid for a limited period of time. Betty could have become eligible after the waiting period expired. Once Betty qualified for Medicaid, that program, not Elizabeth, would have become responsible for her cost of care. But, since Elizabeth ignored the rules, and never followed up with the County Assistance office, her mother never became eligible for Medicaid and the federal protections didn't apply. This left the child responsible for the cost of her parent's care.

Elizabeth obviously needed some expert help to get her mother qualified for Medicaid. The "spend down" and transfer rules are complex. But she needed to understand them. She couldn't just walk away and leave the nursing home with bad debts. Her failure to take the actions needed to get her mother on Medicaid, left her personally liable for her mother's nursing home bills.

Over the years the Pennsylvania courts have been totally consistent in upholding the filial support law. See, for example, Verna v. Berna, 288 Pa. Super. 511 (1981); Albert Einstein Medical Center 212 Pa. Super 450 (1968); Commonwealth Home for the Aged v. Kotzker, 179 Pa. Super 521 (1955); Mattis, 148 Pa. Super 462 (1942).

It is clear that in Pennsylvania children can be held liable for the support of their parents. And there does not have to have been a transfer of assets for the child to be liable. The child just needs to have sufficient financial ability to provide the support.

The liability of a child of adequate means to provide support for an indigent parent in a nursing home is the law in Pennsylvania, and is unlikely to change. If a parent isn't able to apply for Medicaid because of poor planning involving transfers of assets or neglect by the child (as in PA's Budd case), the children are liable. This is going to become a much bigger issue in the future as a result of the likely tightening of the Medicaid asset transfer rules over the next year.

Both parents and children need to be aware of this potential liability. Children have financial responsibility for their parent's care. They cannot just sit back and disregard their parents' health and financial circumstances. A lack of planning by the parent, or poor planning, can come back to haunt the child. When the need for long term care arises, effective planning combined with expert advice regarding the ever shifting Medicaid laws, can protect not only the parent's assets, but the children's' as well.

To find out whether children are required to support their parents in your state, you can check out the helpful map prepared by AARP by clicking here.

*Jeffrey A. Marshall is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, as approved by the Pennsylvania Supreme Court.

1 comment:

CrisM said...

I realize that this article is 3 years old, but it was very helpful to me.

The link going to the AARP map of states that require children to support their parents is dead. AARP must of moved the page. But thank you for the article just the same.