Can an Adult Child be Held Responsible for a Parent's Nursing Home Costs?

On May 7, 2012 the Pennsylvania Superior Court issued an opinion in the case of Healthcare Retirement Corporation of America v. Pittas. The court found a son liable for his mother’s $93,000 nursing home bill under Pennsylvania’s Filial Responsibility Law. This high-profile case raises concerns.

Currently 30 states have laws making adult children responsible for their parents if their parents can’t afford to pay for their own care. They have rarely been enforced. Since it has become more difficult to qualify for Medicaid and have long term care costs paid under that program, it looks like nursing homes are going to start enforcing the filial responsibility law to get paid.

Filial responsibility is the personal obligation or duty that adult children have for protecting, caring for, and supporting their aging parents. In England, the Elizabethan Act of 1601 for the Relief of the Poor, provided that "[T]he father and grandfather, and the mother and grandmother, and the children of every poor, old, blind, lame and incompetent person, or other poor person not able to work, being of a sufficient ability, shall, at their own charges, relieve and maintain every such poor person." These Elizabethan "poor laws" became the model for the United States’ legislation on the same subject.

In Pennsylvania, the first law imposing a duty of filial support is found in the Act of March 9, 1771, which required that children support their indigent parents if the children were of sufficient financial ability. The current Pennsylvania statute provides that certain relatives including a child have the "responsibility to care for and maintain or financially assist an indigent person." However, this responsibility does not apply if the "individual does not have sufficient financial ability to support the indigent person" or if a parent abandoned the child for 10 years during the child’s minority. Neither the terms "indigent" nor "sufficient financial ability" are clearly defined in the law.

An example of its enforcement is the 1994 Pennsylvania Superior Court case, Savoy v. Savoy which involved an elderly parent whose reasonable care and maintenance expenses exceeded her monthly Social Security income. The Superior Court found that she was indigent and affirmed the lower court’s order directing her son to pay $125 per month directly to her medical care providers.

In the case of Healthcare Retirement Corporation of America v. Pittas,

John Pittas' mother was injured in a car accident and spent 6 months in Liberty Nursing Home, a subsidiary of Health Care & Retirement Corporation of America. She left the nursing home and left the country, moving to Greece, leaving a large portion of her nursing home bill unpaid. The nursing home applied for Medicaid for Mr. Pittas' mother but the application is still pending.

The nursing home sued Mr. Pittas for $93,000 under Pennsylvania's Filial Responsibility Law, which requires a child to provide support for an indigent parent. The Lehigh County trial court ruled in favor of the nursing home, and Mr. Pittas appealed. Mr. Pittas argued, in part, that the court should have considered alternate forms of payment, such as Medicaid or going after his mother's husband and her two other adult children.

A three-judge panel of the Pennsylvania Superior Court agreed with the trial court that Mr. Pittas is liable for his mother's nursing home debt. The court held that the law does not require it to consider other sources of income or to wait until Mrs. Pittas’ Medicaid claim is resolved. It also said that the nursing home had every right to choose which family members to pursue for the money owed. The case is now the subject of an en banc reconsideration petition filed with the Pennsylvania Superior Court.

According to elder law expert Professor Katherine Pearson, in the last 30 years there have only been 3 cases discussing the Filial Support Law. What makes this case unique in Pennsylvania, said Pearson, is that "it is the first time substantial dollars have been awarded against an adult son to support his mother who is in a nursing home - almost $93,000. It's a game-changer in terms of the dollars and cents that we are talking about in terms of filial support."

If a parent enters a nursing home with insufficient funds to pay for his or her care, adult children should be vigilant about potential claims against their own assets to pay for that care. Remember, the statute goes both ways, it can also apply to a parent who has an adult child who is indigent. There have been numerous attempts in the Pennsylvania legislature to amend or repeal the Filial Support Law. Contact your representative and/or state senator if you are concerned about the Filial Support Law currently being enforced in Pennsylvania.

 

 

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Filial Support Laws - Am I My Mother's Keeper?

A parable:

A frail old man went to live with his son, daughter-in-law, and young grandson. The old man's hands trembled, and he often spilled his food. He dropped a good piece of china, breaking it. Exasperated, the son and daughter-in-law made the old man wooden bowls and spoons and told him to eat in the kitchen while the rest of the family ate in the dining room. One day, the little boy was playing with wood scraps on the floor. "What are you making?" his parents asked. The boy answered proudly, "I am making wooden bowls and spoons for you, so that when you are old you can eat in the kitchen just like grandpa." The words so struck the parents that they were speechless. That evening the husband took Grandfather's hand and gently led him back to the family table. For the remainder of his days Grandfather ate every meal with the family and no one seemed to care any longer when a fork was dropped or the tablecloth got soiled.

Filial responsibility is the personal obligation or duty that adult children have for protecting, caring for, and supporting their aging parents. Filial responsibility is recognized as a moral duty in most cultures and religions. Is it a legal duty? The duty of parental support is created by statute. Under ancient common-law, an adult child had no duty or obligation to contribute to the support of his parents. In England, a statute changed this in the 17th century. The Elizabethan Act of 1601 for the Relief of the Poor, provided that "[T]he father and grandfather, and the mother and grandmother, and the children of every poor, old, blind, lame and incompetent person, or other poor person not able to work, being of a sufficient ability, shall, at their own charges, relieve and maintain every such poor person." These Elizabethan poor laws became the model for the United State legislation on the same subject.

In Pennsylvania, the first law imposing a duty of filial support is found in the Act of March 9, 1771, which required that children support their indigent parents if the children were of sufficient financial ability. This was obviously designed to relieve state and local authorities from the burden of supporting poor persons who had relatives of financial means who could care for them. The current formulation of the law has been on the books since 1937.

An example of its enforcement is the 1994 Pennsylvania Superior Court case, Savoy v. Savoy which involved an elderly parent whose reasonable care and maintenance expenses exceeded her monthly Social Security income. The Superior Court found that she was indigent and affirmed the lower court’s order directing her son to pay $125 per month directly to her medical care providers.

In July 2005, the Pennsylvania legislature passed an Act which, among other things, moved the filial support provision in the Pennsylvania statutes to a central position in its Domestic Relations Code. The law reads: "all of the following individuals have the responsibility to care for and maintain or financially assist an indigent person: (i) the spouse of the indigent person, (ii) the child of the indigent person, (iii) the parent of the indigent person."

Historically, these filial responsibility laws have rarely been enforced. Some states that have these statutes on the books have never enforced them at all.

Why so little enforcement? One of the main reasons is that the government has taken over this traditionally familial responsibility. Since the 1960's federal law (U.S. Code Title 42 §1396a(a)(17)(D)) has barred the states from considering the financial responsibility of any individual (except a spouse) in determining the eligibility of an applicant or recipient of Medicaid or other poverty programs. In other words, even if family members have a legal duty to support a loved one, the federal government places the burden on taxpayers. In the words of Matthew Pakula, "The moral duty receded as society evolved, family life changed, and government created a variety of federal and state programs to meet the needs of the poor."

As the pending financial crisis of how to pay for the care of the nation’s elderly looms, the issue of family responsibility is coming to the fore. Medicaid is the major funding source for long-term care. If a person consumes his financial assets and his income is low enough, he qualifies for Medicaid coverage. Medicaid paid $60 billion for long term care in 2002. An increasing number of persons are transferring their assets in order to qualify for Medicaid. Their children receive their assets, and the taxpayers pay the bill for their care. Medicaid has become an inheritance protection plan. Enforcement of filial responsibility statutes could bring a stop to this.

Here is an idea that has been put forward: Allow states to consider an adult child able to pay toward care of an indigent parent unless the child files a public notice that they are not responsible for the debts of the parent, foreswears any inheritance rights and consents to the revocation of any trust set up for their benefit by the parent.

But maybe the carrot works better than the stick. Look at what Korea has done: Since 1999, children who live with and support the parents get more inheritance. A person who has supported his or her parent for a considerable time will get 50% more added to his or her share of inheritance. This is called the "filial piety inheritance system."

Honor thy father and mother. The Talmud teaches that `honor' means the son must supply his father with food and drink, provide him with clothes and footwear, and assist his coming in and going out of the house.

See Neil Hendershot's blog post for more information and another point of view:  PA's "Filial Responsiblity" Law in the News .

 

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Will You Receive a "Negative Inheritance?"

"Negative inheritance," a term coined by Laurence Kotlikoff, a professor at Boston University, describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

A large portion of baby boomers find themselves becoming the caregivers for their parents. Many of these caregivers want to care for their parents and are pleased to be able to help, but it takes a huge financial and emotional toll.

They are called members of the "sandwich generation," sandwiched between the often conflicting demands of raising and educating children and caring for aging parents and other relatives. Almost 3 in 10 of those aged 45 to 64 with unmarried children under 25 in the home were also caring for a senior. About 20% of workers 45 and older provide financial support to a parent. About 33% of workers 45 and older with a grown child over age 25 pay rent or provide housing for that child.

Providing financial help for both children and parents often that means delaying retirement. According to a survey conducted by Brightwork Partners for Putnam Investments, 42% of those supporting their parents said they'll work for pay in retirement as a result, while 26% said they'll delay their retirement. Thirty-five percent of retirees have returned to the job market, according to the survey. A year ago, the figure was 29%.

What to do? Financial planners recommend a combination of family dialogue, long-term care insurance and proactive management of aging parents' remaining assets. Family dialogue - what’s that? That means actually talking about plans for the future with your parent and siblings - something that for many families is very hard to do. Family dynamics around "money talk" are very difficult. If you are one of the parents - be a grownup and start the conversation yourself. No one knows what the future will bring, discuss various possibilities. And don’t start out by saying "you’ll never put me in a nursing home, will you?"

For those boomers who are at a higher risk of supporting and caring for their aging parents, determining the parents’ financial health and finding out what plans they have, if any, is important. If the parents are likely to run out of money, the first priority is to buy long-term care insurance. If the parents can’t or won’t pay for it, the children should. It makes much more financial sense than paying for care or sacrificing career and income when the time comes. The long-term care insurance has to be purchased before the injury or illness occurs. The parents need to be relatively healthy to qualify for a plan.

When parents can’t qualify for long-term-care insurance, it becomes even more important to manage the parents’ assets and make plans for the future. It may be necessary to sell the family home. You might try to get help from other adult children. Your parents may be able to borrow agasint life insurance policies or sell them on the secondary market. Perhaps your parents should take out a reverse mortgage on their home.

The cost to an adult child of caring for parents is not necessarily an out-of-pocket payment of Mom and Dad’s bills. Instead, the child may have to stop working to care for elderly parents or work part-time. Being stretched thin may affect performance and advancement on the job. Caring for an elderly relative itself can be a part-time job, if not a full-time job. The mental, physical and emotional pressures can be devastating for the care giver.

I agree with Stephen W. Follett, Esq., who says, "I dislike the term "negative" inheritance. I believe that it demeans the legacy of loving parents. Similarly, it diminishes the return of love by children. Caring for parents is a labor of love. Inheritances are not a right. Everything wrong with this term begins with the underlying premise that we should expect a financial inheritance from our parents." In other words, what is negative about caring for your parents? Recognize that you have no right to an inheritance.

How different this is from the attitude of another planner who asks, "What is the Black Death of a financial plan?" The answer: "It’s your parents."

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Am I My Mother's Keeper?

Neil Hendershot has an excellent post today on Pennsylvania's Filial Support Statute.  He quotes Professor Katherine Pearson's sidebar in the Summer 2008 issue of Adventures in Law and Aging, "“SO, WHAT IS THIS ‘FILIAL SUPPORT’ THING?” and provides many citations to useful resources.

This is a signifcant moral as well as legal issue.   What is your obligation to your parents?

A parable:

A frail old man went to live with his son, daughter-in-law, and young grandson. The old man's hands trembled, and he often spilled his food. He dropped a good piece of china, breaking it. Exasperated, the son and daughter-in-law made the old man wooden bowls and spoons and told him to eat in the kitchen while the rest of the family ate in the dining room. One day, the little boy was playing with wood scraps on the floor. "What are you making?" his parents asked. The boy answered proudly, "I am making wooden bowls and spoons for you, so that when you are old you can eat in the kitchen just like grandpa." The words so struck the parents that they were speechless. That evening the husband took Grandfather's hand and gently led him back to the family table. For the remainder of his days Grandfather ate every meal with the family and no one seemed to care any longer when a fork was dropped or the tablecloth got soiled.

History:

Filial responsibility is the personal obligation or duty that adult children have for protecting, caring for, and supporting their aging parents. Filial responsibility is recognized as a moral duty in most cultures and religions. Is it a legal duty? The duty of parental support is created by statute. Under ancient common-law, an adult child had no duty or obligation to contribute to the support of his parents. In England, a statute changed this in the 17th century. The Elizabethan Act of 1601 for the Relief of the Poor, provided that “[T]he father and grandfather, and the mother and grandmother, and the children of every poor, old, blind, lame and incompetent person, or other poor person not able to work, being of a sufficient ability, shall, at their own charges, relieve and maintain every such poor person.” These Elizabethan poor laws became the model for the United State legislation on the same subject.

In Pennsylvania:

In Pennsylvania, the first law imposing a duty of filial support is found in the Act of March 9, 1771, which required that children support their indigent parents if the children were of sufficient financial ability. This was obviously designed to relieve state and local authorities from the burden of supporting poor persons who had relatives of financial means who could care for them. The current formulation of the law has been on the books since 1937.

An example of its enforcement is the 1994 Pennsylvania Superior Court case, Savoy v. Savoy which involved an elderly parent whose reasonable care and maintenance expenses exceeded her monthly Social Security income. The Superior Court found that she was indigent and affirmed the lower court’s order directing her son to pay $125 per month directly to her medical care providers.

In July 2005, the Pennsylvania legislature passed an Act which, among other things, moved the filial support provision in the Pennsylvania statutes to a central position in its Domestic Relations Code. The law reads: “all of the following individuals have the responsibility to care for and maintain or financially assist an indigent person: (i) the spouse of the indigent person, (ii) the child of the indigent person, (iii) the parent of the indigent person.”

Little enforcement?

Historically, these filial responsibility laws have rarely been enforced. Some states that have these statutes on the books have never enforced them at all.

Why so little enforcement? One of the main reasons is that the government has taken over this traditionally familial responsibility. Since the 1960's federal law (U.S. Code Title 42 §1396a(a)(17)(D)) has barred the states from considering the financial responsibility of any individual (except a spouse) in determining the eligibility of an applicant or recipient of Medicaid or other poverty programs. In other words, even if family members have a legal duty to support a loved one, the federal government places the burden on taxpayers. In the words of Matthew Pakula, “The moral duty receded as society evolved, family life changed, and government created a variety of federal and state programs to meet the needs of the poor.”

As the pending financial crisis of how to pay for the care of the nation’s elderly looms, the issue of family responsibility is coming to the fore. Medicaid is the major funding source for long-term care. If a person consumes his financial assets and his income is low enough, he qualifies for Medicaid coverage. Medicaid paid $60 billion for long term care in 2002. An increasing number of persons are transferring their assets in order to qualify for Medicaid. Their children receive their assets, and the taxpayers pay the bill for their care. Medicaid has become an inheritance protection plan. Enforcement of filial responsibility statutes could bring a stop to this.

Ouch

Here is an idea that has been put forward: Allow states to consider an adult child able to pay toward care of an indigent parent unless the child files a public notice that they are not responsible for the debts of the parent, foreswears any inheritance rights and consents to the revocation of any trust set up for their benefit by the parent.

But maybe the carrot works better than the stick. Look at what Korea has done: Since 1999, children who live with and support the parents get more inheritance. A person who has supported his or her parent for a considerable time will get 50% more added to his or her share of inheritance. This is called the "filial piety inheritance system."

Honor thy father and mother. The Talmud teaches that `honor' means the son must supply his father with food and drink, provide him with clothes and footwear, and assist his coming in and going out of the house.