Sunday, December 04, 2011

Would trusts protect family caregivers in states with filial responsibility laws? Good question

I got a question today on a posting made July 7, 2007 here on filial responsibility laws. 

Someone had set up an irrevocable trust and was concerned that a state could still go after him or her personally for a parent’s nursing home stay, or that the nursing home could go after him. 

I went to my first brainstorm session on trusts back in August 2008, in northern Va.  Generally, one of the reasons people set up trusts is to protect the assets in them from litigation brought against individuals, either the patient or family members or caregivers (or all of these).  What I remember is that a trust could protect the assets of the parent for actions brought against another household member coincidentally (negligence, libel, etc).  

In any case, someone with this question would have to ask a trust attorney practicing in the state in which the patient lives, and possibly the state in which the family members lives if it is different.  (Interstate issues could get complicated.)   Sometimes people set up their own individual trusts.  

This is a good question. I doubt much have been written about it yet. 

I don’t think it is hard to see serious political, social and legal troubles ahead.  There are more severely disabled elderly living longer (especially with Alzheimer’s), and people in many economic strata are having fewer children.  That dynamic is already affecting the social security and pension debate.  States, not having the ability to print money (much like European countries in the Euro zone now), are stressed, and will tend to go after adult children capable of paying rather than allow parents to go on Medicaid, even when assets haven’t been spent down.  Look for real problems in California soon.  (Not all states have filial responsibility laws, or “poor” laws, however.)

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