Are Children Responsible For Their Parent’s Debts?, Ep #70

What would you do if a $90,000 bill showed up in your mail a few weeks after your parents passed away? Can creditors pursue children for the medical expenses of their parents? We’ll get into it on this episode.

But first, I want to address what’s going on in the markets. It looks like there may be rough seas ahead for investors. It’s what’s known as a “bear” market – and bear markets last 13 months on average and take almost two years to recover.

Will this time be average? Will it become worse? You can hear my take on it on this episode as well as my recommendations about what you should do in light of it. All that and a bit more on this episode of Retirement Starts Today Radio.

Are children responsible for their parent’s #debts? Could be. Listen to this episode of #RetirementStartsToday to find out more. #Retirement #Investments #RetirementPlanning Click To Tweet

Outline of This Episode

[0:59] What’s a “bear market?” – Anything that’s at least a 20% decline over recent highs
[5:18] Filial laws do allow the debts of parents to transfer to their children
[8:11] The Joseph Eori case: a child sued his own siblings for care costs for his mother

I’m an eternal optimist, but I prepare pessimistic retirement plans. Here’s why

None of us can predict the future. But we can predict one thing: the long-term upswing in the market that we’ve experienced won’t last forever. In fact, it’s due to shift downward, which is what we’re seeing with the emerging bear market underway.

This podcast is all about preparing for EXACTLY those kinds of eventualities. When the market goes south, you don’t want your investments to speculative. Education is powerful. You need to discover the facts that help you make informed decisions. That’s why Retirement Starts Today exists.

Keep listening. I’ll be here every Monday morning in 2019 to give you every tip, trick, and suggestion I can think of. I want to help you weather the bear market.

3 things to do to equip yourself for the bear market that’s underway

To prepare for the bear market, I want you to do three things right now. Promise me…

#1 – Turn off cable news and stop reading click bait articles.

Markets that are going south are a heyday for network news channels. They fuel the fire of panic and drive interest in their programs. It’s true for both TV and internet based news outlets. When you tune in, you see their ads, and they make money. They are not there to serve your interests or to help you know what’s going on. They are there to make money for themselves. So stop listening to them.

#2 – Don’t be fooled by the financial hucksters out there. And there are lots of them.

I’ve already seen ads on social media for advisors who are offering to sooth your bruised portfolios. They promise that their latest/greatest product will protect you. The problem is this: The products they are selling are questionable. And they only serve to line the pockets of the hucksters. DON’T DO IT! Hang onto your cash and make smart decisions.

#3 – Count how much cash you have in your 401k/IRA.

I’m not talking about percentages here, I mean cold, hard cash. Add it up and then divide that number by your gross monthly retirement distribution. If you have several months of income there, you are looking good. If you have more than 2 years, you are looking great. This will give you a gauge on whether you’re at risk should the market take a hard south turn.

If you have means and your parents have debts, you could be sued

It sounds crazy to think that you could be sued for imprudent financial decisions your parents have made. But it’s happening. Courts across the country are ruling that children of deceased parents can be pursued for their parent’s debts.

3 things to do to equip yourself for the #BearMarket that’s underway. Listen to this episode of #RetirementStartsToday to find out more. #Retirement #Investments #RetirementPlanning Click To Tweet

The Pittas Case in Pennsylvania Superior Court

In 2012, the Pennsylvania Superior Court upheld a lower court ruling that allowed a nursing home to get payment from the son of woman for her nearly $93,000 nursing home bill. Interestingly enough, she was still alive when the ruling came down. She’d relocated to Greece with her bill unpaid.

The case is significant because the court made no determination that John had engaged in fraudulent transfers had made any attempt to hide his mother’s assets. So understand that – he had done NOTHING to aid his mother in non-payment of her bills. Yet, her creditors were legally supported in pursuing her son for the debt. The care facility only had to show that this particular son had the means to pay the $93,000 bill.

So the ruling seems to be following the money. That’s not a good omen. LIsten to hear about other cases of this type.

Can it be right that children are responsible for their parent’s debts?

What makes planning difficult when it comes to protecting yourself against filial law decisions is that these kinds of laws aren’t consistently enforced – and many factors could have an impact on whether institutions and creditors pursue these legal provisions.

Nursing home costs continue to rise – with no end in sight
State budgets continue to tighten
If recession comes, local government budgets will tighten further

I have a sneaking suspicion that we’ll hear more about filial laws in the future. If you are a Baby Boomer with aging parents and they are considering a transition to a nursing home, think over this issue. Think extra hard if you’ve got hard-earned retirement savings to protect. Currently 30 states have filial-type laws on the books. Listen to learn more.

Can it be right that children are responsible for their parent’s #debts? Listen to this episode of #RetirementStartsToday to find out more. #Retirement #Investments #RetirementPlanning Click To Tweet