Planning for your parents retirement…you should be!

Ever hear of Filial Support Law?

The little unknown law on the books of 29 states that has the possibility to impact anyone who has a parent residing in them. Under this law each state can go after the families of people who have unpaid health costs which they accrued while being enrolled under Medicaid.


According to Mike Padawer, an expert on the subject planning for Long-Term Care and the author of two books on the subject, “What is the deal with Long-Term Care” and “What you don’t know about retirement will hurt you!” the rules are pretty simple for the states. If a person or persons happen to qualify for Medicaid and there is a bill at the end of that coverage term then these states, the 29 of them, can go after not only the estates of those insured by Medicaid, but also anyone of or all of the family members in order to pay that bill.”

Think about it ladies and gentlemen, how many of you have parents that may need some form of Long-Term Care assistance and have been told as planning advice to just hide the assets and qualify for Medicaid?

Well, for one lucky man in Pennsylvania it just happened that way. Back in 2012 a Pennsylvania court ruled in the case of “Health Care & Retirement Corporation of America v. Pittas”, that the son, John Pittas, was responsible for his mother’s Nursing Home bill, even though she may have qualified for Medicaid. To add insult to injury he argued that he should not be alone in having to cover these costs, that he had other siblings who should bear the brunt as well, but the state found that he was best apt to cover the expenses, so he had to pay the bill.

Yes, under this Filial Support law, the state can choose which family member they want to recover the assets from in order to pay the bill, so if you happen to be just a little more successful than one of your brothers or sisters you may just be the one footing the bill if your parents don’t plan accordingly.

And the next problem, the Affordable Care Act.

Under the ACA, those who are looking for health coverage and who have little to no income must first apply for Medicaid through their respective state. If they do qualify, by decree of the ACA, they will have to accept this Medicaid coverage and again under already established laws the state must try to recover all of the expenses at some point and in these 29 states it just means that the state can target the family members too.

This means the problem is no longer subject to those older folks who rack up just Nursing Home costs, but for those of all ages who have little to no income and enroll into Medicaid for their health insurance.

Sort of makes having to have health insurance under a decree of law take on a new meaning. For those younger folks who have assets, but who show little to no income might just be risking not only their future assets, but also their family members too if they actually need care.

To quote Mr. Padawer again, “The problem filial law creates is the fact that even though you have no income, but may have assets by law you are on the hook for the entire amount that Medicaid has spent on you. Think you can hide those assets in trusts and sneak off into the sunset…think again, these states can just go after your family members and to add insult to injury, if your family members have to crack open those trusts to foot the bill, then there will be even higher costs due to penalties”.

Mr. Padawer went on further to state, “Funny how one little thing, healthcare, can impact practically every single person you meet and how many financial firms are attacking this problem…three. Nationwide, Fidelity and Jester Financial”.

For those that want to tackle this problem the solutions can be simple, all one needs to do is:

First: understand what the costs of your health will be in retirement, which can found at either Nationwide or Jester Financial, one of the only firms in the country providing software tools to help consumers calculate these costs.

Second: investigate how to leverage certain forms of life insurance, specific annuities (and we mean specific) and select investments that can help control the increasing cost of health.

Third: implement the plan by working with financial professionals who understand the real issues of retirement. Pleased do not be fooled by the wonderful amounts of initials after a financial advisors name, as stated earlier, only 3 financial companies are tackling this issue.

Fourth: STOP listening to those financial gurus who seem to have no idea about health costs or who do not take this cost seriously, because in the end your only really tangible asset is your health and it could end up costing both you and your family.

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