Hold Back On That New iPhone, You May Need The Money To Support Your Mom and Dad

Few realize that children in Pennsylvania have a legal obligation to support their indigent parents. Not only is it a moral obligation, but it is codified in the Pennsylvania law as a filial support obligation.Title 23, Section 4603 of the PA Code provides that the spouse, child, or parent of any indigent person is responsible for their care, whether or not they are a public charge (collecting welfare).

The law was often ignored until parents left personal care or rehab homes owing debts for services provided. The law has become more important due to Medicaid cutbacks, so an older law was updated and strengthened in 2005.

In one case under the older law a daughter, who held a financial power of attorney form, refused to use it to pay the debts of her parent and instead used the Power of Attorney to transfer money to her personal account. In the case of Presbyterian Medical Center v. Budd she was held liable for her parents care and the outstanding bill of $96,000.

More recently, our Pennsylvania Superior Court on May 7, 2012, held a child responsible for a parent's care costing $92,343.41 at an institution in Lehigh County. The plaintiff in this lawsuit was the Healthcare and Retirement Corporation of America, the same corporation that owns HCR Manor Care in Devon PA, Arden Courts of King of Prussia and 288 facilities in other states.

They were reached at corporate headquarters in Ohio. A spokesperson stated that they don't normally ask family members to use their own personal funds to pay for their loved ones' care, but this case was an exception.They do require that family members who are responsible parties for financial issues gather needed documents, if necessary to apply for Medicaid. 

There is a correct way and wrong way to do estate planning. The correct way is to plan ahead for the care of parents with the help of a professional. This may include Medicaid planning, long-term care insurance or estate planning.

The wrong way is to ignore the problem until the older family member incurs costs for medical care. An inexperienced agent holding a Power of Attorney may not be able to gather the necessary documents in time to file a Medicaid application. As a consequence, children may be sued for support.

It is noteworthy that any action brought under the statute is categorized as a support action. That has serious implications. It is treated the same as child support. This means that wages may be attached to satisfy the obligation. There may be difficulty selling a house unless the outstanding support obligation is satisfied at the settlement table. In some states, an outstanding support obligation may affect one’s ability to renew a license.

But worst of all, Section 4603 (d)1 of the law provides that the obligor may be held in contempt of court and face imprisonment for up to six months for ignoring the support order. You cannot normally be imprisoned for your debts, you can if it's a contempt order related to outstanding support.

So, children, now is the time to become involved in your parents’ plans for their future, or put some money away for a possible support obligation in the future. 

To add salt to the wound, if sued for your parents' support, because of other recent court decisions in Pennsylvania, you may be obligated to give the lawyer collecting support your Facebook password so they can log into your account and discover your living style. More about that in my very next post.

A copy of the court decision handed down on May 7 is attached as a "PDF" file.

Stay well until the next post.

- Bob Gasparro

Robert Gasparro is an Elder Practitioner (an accountant and attorney). He can be reached at robert.gasparro@lifespanlegal.com.