How Your Parents’ Debt Could Survive Them | Personal finance

  • Co-signer of a loan, holder of a joint account or otherwise agreed to be held responsible for the debt.
  • Are the surviving spouse and live in a community property state or a state that requires surviving spouses to pay debts such as medical bills.
  • Were legally responsible for settling the estate and did not follow state law.

For example, if you are the executor of your parents’ estate and you distribute money to yourself or other heirs before repaying creditors, creditors could sue you to recover the silver.

Should we fear “filial liability” laws?

More than half of states still have “filial liability” laws that could technically force adult children to pay their impoverished parents’ bills, says Letha McDowell, an estate and elder law attorney from Kitty Hawk, Carolina. North.

These laws are holdovers from a time when debtors’ jails existed, says McDowell, who is president of the National Academy of Elder Law Attorneys. Their use has faded since the creation in 1965 of Medicare — the health coverage program for those aged 65 and over — and Medicaid, the health coverage program for the poor.

Filial liability laws are rarely enforced, although in 2012 a nursing home chain used Pennsylvania law to successfully sue a son over his mother’s $93,000 bill. Some legal experts have predicted more such lawsuits as long-term care costs rise, but so far that hasn’t materialized, McDowell says.

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