Parents are often very close-mouthed about their estates and affairs. Although adult offspring do not have a general right to enquire about their parents’ finances and estate plans, circumstances may arise that generate concern. Long-widowed elders may come under the influence of younger caregivers or neighbors. I had an 82-year-old client who fell for and married a 46-year-old gold digger.
Financially unsophisticated persons may be vulnerable to agents selling questionable investments. One of my clients loaned $50,000 to a friend of her unscrupulous financial planner. The loan was on a promissory note – not a mortgage – supposedly secured by a medical building in Arizona. Unscrupulous financial planners are not always operating out of cheap offices over bodegas. Banks often persuade depositors to buy unsuitable annuities.
Many sons and daughters who had assumed that their parents were comfortably well off find that they are living hand-to-mouth because their assets have been mismanaged or even stolen. Adult offspring may be hesitant to enquire too closely, but they have a legitimate concern – filial responsibility. Family members may be ordered to support indigent relatives in many states. Pennsylvania has a law that explicitly requires sons and daughters who have means to do so to support their needy parents, and vice versa. The statute places “responsibility to care for and maintain or financially assist an indigent person” on the person’s spouse, son or daughter, and parent. 23 Pa.C.S.A. § 4603(a)(1).
For a really scary case in which a court ordered a son to pay $93,000 to a skilled nursing facility for his mother’s care, see HCR v. Pittas, 2012 Pa. Super 96 (May 7, 2012). The Pittas case is alarming for many reasons. The court awarded the mother’s nursing home $93,000 for a six-month stay. This in itself is odd – nursing-home costs in Pennsylvania generally do not exceed $8,000 per month. Furthermore, the court failed to analyze the son’s financial means properly. The court noted that the son had income of $85,000 per year, but did not consider his support obligations for other dependants or his own financial needs, as the statute requires. Additionally, the statute under which the court awarded damages is a “support” statute which normally would not apply to past obligations. There are many aspects of the court’s decision that are out of kilter, but it provides an object lesson on the possibility that adult children and parents could be ordered to pay for care of family members in nursing homes. On March 27, 2013, the Pennsylvania Supreme Court denied review.
Michigan law only imposes a support obligation on parents for indigent children, but sons and daughters who sign as guarantors for their parents at nursing homes or assisted living facilities may be sued for the care. I have had several clients who were being sued for their parents’ care.
Gifts and loans to relatives can give rise to liability if the person who made the gift or loan goes into a nursing home and needs Medicaid within five years. The Medicaid agency my deny coverage for nursing home costs. If the nursing home is unpaid, it may sue to recapture gifts or loans.
Older people do not have it easy and the government creates additional hazards. In addition to health problems and the loss of family and friends, the government closely examines their financial history if they are unfortunate enough to be in a nursing home and apply for Medicaid. The Medicaid agency assumes that anyone over 65 is waiting eagerly for the chance to get into a nursing home and apply for assistance. Younger family members have a legitimate concern for their seniors’ financial security. Over and above the fact that they care about their parents’ and other older relatives’ comfort and peace of mind, those younger family members could be required to provide financial support. Pointing this out to the loved ones may make it easier to raise difficult financial questions.
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com ©2012 John B. Payne, Attorney