Having done a class for our existing clients about filial support law, I decided to share this important information with you.
Filial Support Law is the Pennsylvania law that can hold family members responsible for their parents’ or other indigent family members care costs. This law has been around for a while, but it did not come to fruition until 2014. Family demographics were different in the past, because the adult child caregiver cared for their elderly parent. As a result, not many seniors needed care in nursing homes. As a result, care providers didn’t need to ask the kids to pay for mom or dad’s care costs.
However, times have changed, and with a large population of baby boomers reaching their retirement years, it raises the concern of who will take care of them. Since many more people are living longer now, into their 80’s and 90’s, there will be more seniors needing care. With the cost of care in nursing homes being $150,000 per year, most families are not prepared for that. It’s not the nursing home’s fault, as they are providing valuable care. The biggest concern is getting the care that you need without going broke. It is unfortunate that we have a broken care system when it comes to taking care of seniors in this country. This is why we urge you to get an estate plan as a retiree, if not earlier. We don’t believe you work 40-50 years to save a nest egg, only to lose it to long term care costs.
When it comes to Filial Support Law, if there’s an indigent person or parent being cared for in a nursing home, the care provider needs compensation. The spouse or the adult child can be pursued for compensation. Those who drafted this law did not define what an indigent person is, but there’s very little caveat, so the amount which you may be held responsible for, is six times your monthly income every year. As an example, if somebody earns $120,000 per year based on $10,000 per month, they could be held responsible for that monthly income to pay for their parent’s care.
The care provider doesn’t need to prove anything besides the fact that your parent is being cared for. It doesn’t matter if you don’t have a good relationship with your parent. You could make an argument that you don’t have the financial resources to pay for mom or dad’s care. There’s a little caveat about this law indicating that a family member cannot be held responsible if they don’t have enough money. Unfortunately, they don’t define what it means.
What happened with the Pittas case in 2014, was that Mrs Pittas ended up in a nursing home after being in a car accident. She needed care and a rehab stay in the nursing home and she started racking up a bill. Mrs Pittas did not pay for her care, and when she recovered, she was discharged from the nursing home. She left the country without paying for her care, and joined her husband in Greece to live with one of their kids.
The nursing home bill for Mrs Pittas’ care, was $93,000 which had to be recovered. Mrs Pittas’s Son was living in Pennsylvania at the time, and he was sued for his mom’s $93,000 bill. He didn’t know that his mom didn’t pay for her care. Mr Pittas fought the bill and won the arbitration case. However, the case went to the trial court who ruled in favour of the nursing home. He lost the $93,000 lawsuit, and had to pay his mom’s nursing home care bill.
How this may affect you, is when a family member ends up in the nursing home and is ineligible for Medicaid. Since Medicaid looks at your assets, Medicaid can deny coverage if you’ve given your money away in the last five years. Medicaid doesn’t want you to give your money away today, and ask Medicaid to pay for your nursing home the following week.
In simple terms, if mom gave a $300,000 home to the kids, but dad needs care within the next five years, he will not be eligible for Medicaid. This is based on the Medicaid rules for the 5 year look-back period. Medicaid will divide the gift amount of $300,000 by the average monthly cost of a nursing home. Based on an average monthly cost of $15,000, the answer is 20 months. This is the length of time you will not be eligible for Medicaid benefits. The reason for this is because the state is not paying the nursing home. As a result, they will look for other means to recover this money. If you are the spouse or adult child, you may be responsible for paying the nursing home bill. To avoid this happening, you need an estate plan which will protect you, your assets and your family.
Being eligible for Medicaid is one of the many topics we cover at our FREE Workshops. At Sechler Law Firm, we believe that education is very important. This is why we offer our “Three Secrets to Protect Your Legacy” Workshops to teach you about Estate Planning. Register HERE for a free Workshop, which we host in various locations around Greater Pittsburgh every month.
Estate planning is not just about answering the question of who gets your stuff when you pass away. Rather, having an estate plan will protect your assets. It will also ensure that those who inherit your money won’t have a problem. I am referring to the complications that may arise when beneficiaries are underage, disabled or possibly subject to a lawsuit. You can’t just give them a bag of money or for that matter, your home without doing some careful planning. Estate Planning is complicated, so we can help you to avoid making costly mistakes. We are here to help you!! Download this FREE Guide to help you understand the importance of estate planning so you can avoid making mistakes.
