Currently, more than half of U.S. states have a “filial responsibility” law on the books. But what is filial responsibility? These laws basically require that children have a duty to provide certain financial support to parents who cannot afford their bills. So if, for instance, an elderly parent was unable to pay a nursing home bill, the home could pursue payment from one of the children.
Each state’s specifics vary, with some limiting the responsibility to medical bills only, while others include food, shelter and other necessary costs. But don’t panic, says Thomas Anderson, senior director of advanced planning at Northwestern Mutual: These laws are holdovers from decades ago. Every state used to have some form of a filial responsibility law in the era before governmental programs like Social Security, Medicare and Medicaid were implemented to help support people based on need and age.
HOW FILIAL RESPONSIBILITY LAWS ARE USED TODAY
These days, Anderson says filial responsibility laws tend to be used more sparingly, and usually when it appears someone may not be on the up-and-up.
“For example, Dad sold the farm for a very low price to give money to the kids and then wanted the government to pay for his health care — they’re not going to go for that,” he adds. “Or a son used a financial power of attorney to get Mom’s money, and the state says, well, no, that was Mom’s money to use for her health care. So they pull out this dormant filial law to prevent that.”
Just as invoking the law is inconsistent, so is which sibling ends up shouldering the responsibility. Technically, all the siblings are liable — but filial responsibility laws can be used to try to get money from the child with the greatest assets or income, or from all of the children.
“They might check out the kids and say, ‘This woman’s a doctor, so let’s just sue her,’” Anderson says. “And then she may have to sue her three siblings to get back their share of the responsibility that she had to pay. It can become a real mess.”
WHAT TO KNOW ABOUT FILIAL RESPONSIBILITY
The best way to avoid an issue with filial responsibility, Anderson says, is to get involved with your parents’ financial planning to ensure they’ll have the money to cover these costs themselves. A financial advisor, estate planning attorney and/or an elder law attorney can help you come up with a plan to ensure your parents’ assets last for as long as they need.
You should also make sure Mom and Dad aren’t handing out cash gifts that they can’t afford to you or your siblings — or anyone else. “The government is always going to look at what Mom gave away before she died,” Anderson says. “So if you coaxed mom into giving you money and now she can’t afford her health care, that’s where you get into issues.”
For example, in determining eligibility for the need-based program Medicaid, the government will look back at five years of finances. It will look closely at any cash gifts, and if those outflows are large enough, your parents could be determined ineligible for aid for a certain period — aid that they may have been counting on to pay their health care bills.
“Say Mom and Dad give each kid $50,000 to leave a legacy, and two years later Dad gets Alzheimer’s disease and they want to go into a nursing home — but they find out they’re not eligible for aid for X number of months because of those gifts,” Anderson says. “It’s not a time when you want them to have a big surprise — or for you to have to worry that you could be on the hook for these bills. As always, planning ahead can remove that need for worry all around.”
WHICH STATES HAVE FILIAL RESPONSIBILITY LAWS?
The following states still have some form of filial responsibility laws. If your parents live in one of these states, you could potentially be on the hook for their expenses. If you’re concerned about having to pay a large bill for your parents, check with a local legal expert to see if your state’s laws could apply to your situation.
• New Jersey
• North Carolina
• North Dakota
• Rhode Island
• South Dakota
• West Virginia
• Puerto Rico