If you’re not familiar with Filial Laws, it’s time you take notice of what they are and how these laws can impact your financial future. A few decades ago, our US welfare system would cover nursing home and medical costs for someone without the financial resources to so. Back then the children were ‘off the hook’ to pay, and in some cases, beneficiaries still had access to their parent’s assets and avoided surrendering assets for unpaid bills. Many people today still think that is current policy; it’s not and the likelihood of you paying for your parents or another family member is a real possibility. Filial laws take into account the situation of the individual as being ‘impoverished’ and don’t always apply to someone who is elderly.
Filial responsibility is ‘A duty owed by an adult child (and siblings) to care for ‘necessities of life’ for their parents. This means payment of medical bills, nursing home care, and costs to help the individual. Under filial laws, there is the possibility that the duty can be extended to other family members besides the children. In other countries, these types of laws have been enforced for generations and are a part of a culture where ‘family takes care of the family’. As of December 2017, 30 states in the US have Filial Laws.
Because you’re planning financially for yourself as you age, you also need to consider planning for your parents. Have a conversation with them regarding long-term care insurance and/or, if they have the resources to pay for care. This may lead you to the conclusion to cover the costs yourself to avoid being sued. If you’re a pre-retiree or retired, you need to plan for long-term care in order to avoid passing the bill for your care to your children or grandchildren.
After decades of this law not being enforced, and with the aging population, our society is seeing more people entering the nursing home that either doesn’t have the financial resources or didn’t plan for it. Filial Laws come into play when an individual is already receiving state support, and have a medical bill or nursing home bill they can’t pay, or their cost of care is exceeding their Social Security Benefits, they don’t qualify for Medicaid, and the caregiver (hospital/nursing home) believes that the patient’s child has the money to pay the bill.
As your financial advisor, I recommend discussing your plan to pay for your care or a family member’s care, so your assets are not depleted prematurely due to Filial Laws.