How to Minimize the Likelihood of a Filial Support Lawsuit

October 26, 2023
Nichole M. Baer

Welcome back to our series on Pennsylvania’s Filial Support Law and its implications for families. In our previous two blogs (Pennsylvania’s Filial Support Law – What is it?  and Pennsylvania’s Filial Support Law – Why should you be concerned?), we delved into the critical aspects of this often overlooked legal facet. Today, we’re taking the conversation further with our third and final installment: “How to Minimize the Likelihood of a Filial Support Lawsuit.”

In our journey so far, we’ve uncovered the intricacies of Pennsylvania’s Filial Support Law, exploring why it’s an issue that deserves your attention and gaining a solid understanding of its fundamental workings. As we navigate the final part of this series, we’ll be shedding light on practical strategies that can help you steer clear of potential financial and legal pitfalls associated with this law.

Asset Preservation vs. Filial Support Liability: A Balancing Act

The first thing to remember is that asset preservation and filial support liability are fundamentally in conflict.  Asset preservation plans are made to ensure that the next generation will inherit wealth in the form of money, securities, land, or businesses.  While filial support and Medical Assistance are designed to ensure a parent is taken care of when they cannot care for themselves.  If a parent gifts all or most of their assets to their children or grandchildren, there are no funds to care for them when needed.

Navigating the Medical Assistance Application Process

The second thing is to be involved in the process of Medical Assistance application for those persons who you might be financially responsible for.  Don’t assume that the application was done correctly, and don’t presume that there were no transfers that would disqualify the applicant.  When applying for Medical Assistance, provide ample evidence of the applicant’s finances.  This includes bank and investment statements, records of all transfers within the past five years, copies of checks transferring over $500, and deeds.  Failure to provide adequate verification will result in a denial of the Medical Assistance application and may result in filial support liability.  Also, advise your parents and grandparents not tomake large cash withdrawals.  They are challenging to track and account for what those funds were used for.  Remember, the applicant is often not competent and cannot advise you.  Realistically, even competent persons could not provide information on cash withdrawals from sixty months ago.

Gifts and Asset Transfers: Proceed with Caution

The third thing is to be careful with gifts.  If your parents are elderly, they should be cautious about giving gifts to any person.  While there are some techniques to move assets and still qualify for Medical Assistance, these need to be done at the right time to avoid any five-year look back.  In addition, there should be written evidence with reasonable interest when making a loan to a struggling child.  Five years is a long time to look back on any asset transfers.  For example, did your mother make large gifts at Christmas time?  Did your father transfer his interest in the hunting cabin to you for zero dollars?  Did your parents gift money for your child’s education?  Did they help a child with a debt?  All of these could be potentially disqualifying for the applicant.

Empower Your Family’s Financial Future

Encouraging thorough financial and estate planning is an essential step in safeguarding your family’s financial well-being. Collaborate with trusted financial advisors and legal professionals to craft comprehensive plans that encompass Wills, Healthcare Powers of Attorney, Financial Powers of Attorneys, Living Wills, and Trusts. Effective estate planning techniques can provide asset protection and offer a safety net when individuals are unable to advocate for themselves.

At RKG Law, our experienced estate planning attorneys are dedicated to helping you navigate the complex landscape of estate planning, ensuring your family’s legacy is preserved while minimizing the risks associated with filial support liability.

As we conclude this series, remember that knowledge is your greatest ally in facing the challenges posed by Pennsylvania’s Filial Support Law. By employing proactive strategies and informed decision-making, you can secure your family’s financial future while honoring the care and support owed to your aging loved ones.