The North Dakota Supreme Court has upheld a lower court ruling that the son of deceased nursing home residents is liable for the unpaid costs of care provided to his parents. The case was returned to the lower court to properly apportion the liability among the son, his 5 siblings, and the parents’ estates.  The case is Four Seasons Healthcare Center v. Linderkamp,  213 ND 159 (September 4, 2013).

Elden Linderkamp’s parents resided in the Four Seasons nursing home from October 2006 until their deaths in December 2009 and September 2010. After their deaths Four Seasons sued Elden for the unpaid cost of care it provided to the parents.

Fraudulent Conveyance

As part of its case, the nursing home sought to void a deed of real estate from the parents to Elden and his wife, Rita, on the grounds that it involved a “fraudulent conveyance.”

North Dakota law [N.D.C.C. § 13-02.1-04(1)], provides:

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

a. With actual intent to hinder, delay, or defraud any creditor of the debtor; or

b. Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction or the debtor intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.

Elden had been farming the property in question for over twenty years under a lease from his parents. In August 2006, two months before the parents entered the nursing home, they signed a contract selling the property to Elden and his wife for $50,000. The final deed was signed in November 2006.

The lower court determined that the transaction was fraudulent because Elden had paid less than the property was actually worth. It voided the deed as a fraudulent conveyance.  The Supreme Court affirmed this aspect of the lower court’s decision.

Filial Support

In addition, the nursing home sought to hold Elden liable for his parents’ cost of care under North Dakota’s filial support law. That law (N.D.C.C. § 14-09-10) states:

It is the duty of the father, the mother, and every child of any person who is unable to support oneself, to maintain that person to the extent of the ability of each. This liability may be enforced by any person furnishing necessaries to the person. The promise of an adult child to pay for necessaries furnished to the child’s parent is binding.

Although the statute mentions that a child’s promise to pay for necessaries is binding, it is clear that no such promise is required to make the child liable. Pennsylvania has a similar law – See, 23 Pa.C.S.A §§ 4601-4606 (2005) (Support for the Indigent)

The lower court held that under the filial support law Elden was personally responsible for the unpaid cost of his parents’ care. The amount due the nursing home was $104,216. The lower court refused to consider whether Elden’s siblings were required to share in this liability.

On appeal, the Supreme Court agreed that Elden was responsible for the cost of his parent’s care. It said: “The language of N.D.C.C. § 14-09-10 imposes a duty on children of parents who are unable to support themselves to maintain their parents to the extent of the ability of each child, which may be enforced by any person furnishing necessaries to the parents.”

But the Supreme Court held that the lower court erred in holding Elden solely liable without deciding the extent of the other children’s responsibility under the filial support statute. It returned the case to the lower court for consideration of this issue and apportionment of the debt.

Thus in North Dakota, as in Pennsylvania, the courts will permit a nursing home, as a provider of necessaries to the parent, to sue the children to collect the parent’s unpaid bills. Liability under this curious form of “support” continues for debts incurred by the parent during life, even after the parent is deceased and thus no longer in need of support.

My two cents.

The result in the Four Seasons case is another stark example of the financial risk children bear in states like Pennsylvania and North Dakota for the cost of care provided to their aging parents.

There are ways that families can seek to mitigate this risk. In particular, children need to ensure that their parents maximize any third party sources of payment that may be available such as Medicaid, Medicare, VA pension benefits and long term care insurance. Proper advance planning with a qualified elder law attorney can help keep families out of trouble.

Thanks to my friend Professor Katherine Pearson and the wonderful Elder Law Prof Blog for alerting me to the Four Seasons case.

Further Information on Filial Support laws:

Filial Liability for Nursing Home Costs: North Dakota Supreme Court Weighs In

Elder Law Attorneys Favor Repeal of Filial Support Law

Children can be liable for a parent’s long term care costs in Pennsylvania

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