Currently, 30 states have filial responsibility laws on the books. The Family Code Sec. 4400 reads:
Except as otherwise provided by law, an adult child shall, to the extent of his or her ability, support a parent who is in need and unable to maintain himself or herself by work.
This literally means that your child could grow up, get successful, have a few kids, merge his family finances with the spouse, then have any of their parents' medical bills take away almost everything they acquired, even if they were estranged from the parents! That would not only devastate them, but take away assets from their own children.
While this is new to many and not yet universally enforced, more may be coming because of The Deficit Reduction Act, new health care legislation, and the overspent government, which makes it more difficult to qualify for Medicaid long-term care coverage. This federal rule change has resulted in more nursing homes using filial responsibility laws to pay the bills, as in the recent Pennsylvania case cited as (Health Care & Retirement Corp. of America v. Pittas).
If you think this is just for the old people, look again. Many young people and children are in assisted medical need, and have huge expense in all ages. Some for the rest of their lives, at thousands of dollars per week.
All Family Members are At Risk
If you have family that are financially dependent on you, or could become so, you may want to consider the following:
Make an estate plan that includes a Private Asset Trust to protect whatever you have accumulated. Then protect your kids, so they won't have to pay for you. Then protect other family members.
Estate planning. They should all have at least a simple estate plan. Even if you have to pay for it, taking this step can save you in terms of probate or litigation.
Asset protection planning for Medicare/Medicaid assistance. This can help a parent who may need extensive Medicare/Medicaid coverage avoid losing their assets to the state, but you need to do it now - this must be done at least five years before the need arises.
Life insurance. Look into purchasing life insurance for elderly parents; the benefits could be used to pay final long-term care bills.
Long-term care coverage. If you have elderly parents who count on you for care, buying long-term care coverage may help reduce what can be a substantial cost.
Review elderly parents' health care coverage. Review your elderly parents' health care coverage and fill the gaps so your own financial future is not impacted by unexpected costs.