Aug

8

 Much ink has been spilled about the inter-generational wealth transfer required by the looming Social Security/Medicare implosion, as well as the massive under-funding of many public pension funds. But as the Ginsu Knife commercial hawker says, "Wait, there's more!"

I recently stumbled upon a Pennsylvania Court case, "Health Care & Retirement Corporation of America v. John Pittas." In essence, the Pennsylvania Supreme Court found that children are financially responsible for their parent's care (i.e. nursing home bills).

Evidently, there are 29 states which have statutes which could require adult children to provide financial support for their parents, and giving the financial condition of Medicaid, this is a precedent worthy of study. Interestingly, this so-called Filial Responsibility Law could be simultaneously hailed by Social Conservatives and assailed by Fiscal Conservatives.

This could also be the first step towards multi-generational "means testing" for social benefits… and which could close the loophole that encourages wealthy elderly to distribute their assets to heirs and then receive public support. This May, 2012 link from Forbes discusses the ruling: (If you Google the court case, you can find much deeper analysis too.) One posits that Grandma may soon be leaving the nursing home and moving back to the attic… sitting in her rocking chair…proving once again that Alfred Hitchcock was ahead of his time!


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