Q. My wife and I are concerned that our adult children might be held financially responsible for our care in the event we run out of our own resources. Our children are good kids, but they have their own financial responsibilities, including putting their own kids through college. Can you shed any light on this?
A. Sure. This topic has generated some discussion in the news lately, prompted by a recent case out of the state of Pennsylvania. In that case, a son was held liable for his mother’s unpaid nursing home costs of about $93,000, even when the mother had an application for Medicaid (called “Medi-Cal” in California) pending. The case has sent shivers throughout the country, and elder law attorneys have expressed concern that this case could signal a new wave of claims by nursing homes and assisted-living facilities to recover unpaid bills.
For now, the good news is that the statutes in California seem to disfavor claims of this nature. While statutes are on the books which – on their face – would seem to permit children to be held responsible for the costs of their parents’ care, yet California carves out a huge exception to this liability: if the parent is an “applicant for” or “a recipient of ” Medi-Cal, SSI, or other public benefits, then no claim of any kind can be made to recover the cost of care. In short, the law in California appears very unlike that in Pennsylvania, which apparently did not include a similar exception.
Since a parent in need would most likely qualify for some kind of public benefit, and would presumably apply for that benefit, it would be an unlikely scenario where a child would have financial responsibility for his parent’s care. Indeed, I could not find any reported case decision in California which imposed such liability, absent egregious fact patterns involving extreme neglect of a parent amounting to elder abuse.
Still, the law is developing in this area. Conceivably, I can imagine a situation wherein a parent – for some reason – could not qualify for Medi-Cal, but was nevertheless indigent. Such a parent would not qualify under the exception noted above, and in that situation it is conceivable that a child of means could be held financially responsible. Such a situation might arise, for example, where a parent foreclosed his or her own Medi-Cal eligibility by making improvident gifts of assets to children without complying with the strict Medi-Cal rules regarding gifts. Still another example may be where a child signed as guarantor for the parent’s expenses at a senior living facility.
The best way to ensure that your children do not find themselves on the financial hook is to ensure that you and your wife have a plan in place to pay for your own long-term care. That plan may include setting aside sufficient assets to cover that cost, relying upon long-term care insurance (if you qualify and can afford it), or making a timely application for a Medi-Cal subsidy when appropriate.
Keep in mind that there are lawful strategies to accelerate Medi-Cal eligibility while still preserving assets, but these require strict compliance with Medi-Cal rules. In this regard, Medi-Cal planning is similar to tax planning. These strategies should only be employed under the supervision of an elder law attorney with special expertise in Medi-Cal planning. If handled incorrectly, gifts to children could prevent a parent from qualifying for a Medi-Cal long term care subsidy and expose children to financial responsibility.
Gene L. Osofsky is an Elder Law & Estate Planning Attorney in Hayward. Visit his firm’s website at www.LawyerForSeniors.com