Pull up a chair, you’re gonna need it.
North Dakota has now actively joined the ranks of states who are resurrecting filial support laws to enable state authorities to collect judgements against children for the parents’ nursing home debts.
A filial support law was recently upheld in Pennsylvania in the case of Health Care and Retirement Corp. of America v. John Pittas. In this case, the nursing home, HCR, attempted to use a Pennsylvania statute to hold the defendant, son, liable for expenses incident to his mother’s treatment and care in the nursing facility. The Pennsylvania statute provides that the following individuals have the responsibility to care for and maintain or financially assist an indigent person…
1) the spouse of an indigent person;
2) a child of the indigent person;
3) a parent of the indigent person.
The Nursing facility sued the son of the indigent mother and used the statute as the basis of the suit. The Plaintiff, HCR, supported their case by producing the son’s individual tax returns for four years, his S-Corp tax returns, and bank account statements. The Plaintiff established the mother’s indigency by producing her one checking account records which revealed her total income of $1,000 per month from Social Security and a VA pension.
The Court ruled on the issue of indigency, that an individual didn’t have to be destitute or completely helpless financially. The Court felt that an individual was considered indigent if they didn’t have sufficient means to pay for their own care and maintenance. In this case, the Court held that the mother could not maintain her own care and maintenance based on $1,000 per month. The Court further held that the son had sufficient funds in excess of his normal living expenses to pay for his mother’s expenses and ruled for the Plaintiff in the amount of $91,000. The case was affirmed on appeal.
What Does This Mean For California?
Approximately 29 states have filial laws including California. The California laws relating to such laws are found in the following codes:
Cal. Family Code 4400-4405;
Cal. Family Code 4410-4414;
Cal. Welfare & Institution Code Sec. 12350;
Cal. Penal Code Sec. 270(c).
Basically, California law provides that an adult child shall to the extent of their ability, support a parent who is in need and unable to maintain their expenses through work. Additionally, a promise by an adult child to pay for necessary items for the parent is binding.
The county may bring an action against the child for support. If an action is instituted the Court will consider the following:
1. Earning capacity of the child;
2. Debts and assets of the child;
3. Age and health of the child;
4. Standard of living of the child;
5. Needs of the parent;
6. Other factors the Court deems just and equitable.
Additionally, if the child continues to refuse to support the parent, such child could be guilty of a misdemeanor under Cal. Penal Code Sec. 270(c).
Welfare and Institutions Code Sec. 12350 precludes the effects of the previous statutes and states that no relative shall be liable for the support of any applicant for or recipient of aid under that chapter which includes Medi-Cal.
This provision specifically cites Sec. 4400, 4401, and 270(c) as having no effect if the parent is applying for or receiving aid (Medi-Cal, food stamps, etc.) under that chapter of the Welfare and Institutions Code.
A potential issue may be raised by the wording within Sec. 12350.
“No relative shall be held liable to defray in whole or in part the cost of any medical care or hospital care or other services rendered to the recipient pursuant to any provision of this code if he is an applicant for or recipient of aid under this chapter at the time such medical care or hospital care or other service is rendered.” The question becomes, what if the parent has not applied for aid at the time medical care is rendered?
Two California cases on the books directly involving filial liability are the following:
In Gluckman v. Gaines, 266 Cal.App.2d 52, the Court closely scrutinized the assets and income of both the plaintiff, father, and the defendant, son. Because of the lack of liquidity available to the son and his nominal net income, the Court held in favor of the son in this case. The case, however, exemplifies to what extent the Court will delve into the assets and income of the parties to determine the needs of the parent and the ability of the child to pay.
In Swoap v. Superior Court, 10 Cal.3d 490, the California Supreme Court upheld the constitutionality of the California filial statutes as applied to children of needy parents in applying the doctrine of equal protection. As a result, the counties are secure in knowing that their claims, if properly presented, will be upheld.
If these older statutes become resurrected by the states, including California, to enforce the laws against the assets of children, a whole, new area of estate planning will emerge – protection of children’s assets from the parents long term care expenses. Children may be predisposed into investing in long term care insurance policies for their parents to avoid liability. On the dark side, a child may hasten the “pull the plug” opportunity allowed in the Advanced Health Care Directive to attempt to reduce the potential liability.
There will absolutely be more Medi-Cal applications filed in an attempt to come under the protection of the Welfare and Institutions Code Sec. 12350. The statute specifically states that no relative shall be liable for any expenses incurred for medical or hospital care if the recipient has applied for aid under this chapter of the Code at the time such medical or hospital care is rendered.
This will be an interesting development to watch if 29 states make these dormant statutes active to begin a tidal wave of claims against children for unpaid long term care and medical expenses of the parent.