Many people will go above and beyond to take care of their loved ones, offering support in any way they can. However, in some cases, it’s not just a familial bond that springs individuals into action.
Filial responsibility laws can leave your clients liable for financial assistance to relatives, and it’s up to you to ensure they understand their potential obligations.
The law of the land
There are currently 29 states that have filial responsibility laws on the books, including: Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia and West Virginia.
Citizens of Puerto Rico are also subject to filial responsibility laws.
For example, if your client lives in one of these states and their parents are unable to afford necessary long-term care, they could be held financially liable.
Exact laws differ from region to region, with some imposing penalties on individuals who fail to do what’s considered their filial duty. Some individuals may simply wake up one day to find themselves with a bill for tens of thousands of dollars they weren’t expecting.
In some cases, these laws could lead to jail time for your clients, as well as having their wages garnished or liens established against their property.
In most cases, filial responsibility laws will apply to children and their parents, often when it concerns long-term care. After the introduction of Medicare, it was thought parents would need to rely less on their children for financial support in the future. However, as human life spans continue to increase and the costs of long-term care rise, moms and dads are once again turning to their children for help.
Data shows that 68 percent of men will require long-term care at some point in their lives, while 79 percent of women are in the same boat. Women typically require an average of 3.7 years of long-term care, while men need an average of 2.2 years.
According to the U.S. Department of Health and Human Services, as of 2010, it cost $205 per day or $6,235 a month for a semi-private room in a nursing home. A private room came to $229 per day, or $6,965.
Of course, these figures have only risen in recent years, and a number of factors can lead to even higher costs. For instance, hiring a home health aide can cost $21 per hour, and may be even more expensive depending on the time of day.
“Home health and home care services, provided in two-to-four-hour blocks of time referred to as ‘visits,’ are generally more expensive in the evening, on weekends, and on holidays,” the HHS states.
Keep clients and their loved ones protected
The goal for financial professionals is to make clients aware of these potential pitfalls, and help them devise a plan to both protect their finances and ensure their loved ones will be taken care of.
Your first step is helping your clients understand qualifying standards in their area. Most states maintain that a parent must be indigent in order for filial responsibility to kick in. If parents’ care costs more than their monthly Social Security benefits, chances are they’d be considered indigent. Meanwhile, some states specify that parents must be destitute and too infirm to care for themselves in order to be considered indigent.
Once your clients know the law in their state, you should walk them through scenarios where they may not be be held financially liable.
For instance, if your client is having financial problems of their own, the court may rule they are not in a position to pay for parental care. Or if a client is making significant financial contributions for their child, such as in the case of college tuition, they may also be exempt.
Additionally, if a client’s parents abused or abandoned them in the past, the court may rule the parents are undeserving of financial support.
In most cases, the ideal way to protect clients while also helping them support their loved ones is by investing in long-term care insurance. Children can purchase these policies on behalf of their parents, reducing out-of-pocket costs and lessening the chance they themselves may be held responsible for care costs.