Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com.
Dear To Her Credit,
My father has no assets or money. He has two credit cards
with $19,000 of available credit on each, and he gets $900 in Social Security
benefits each month. He does not qualify for any government assistance, and he
is not a veteran. We live in Alabama. He is in assisted living due to memory
problems.
His four children, me included, have been pitching in to
support him. We all have lives and problems of our own, however, so this is
getting very difficult. If we use his credit cards to take care of him and to
pay for the assisted living facility, will we be liable for his debt when he
dies? -- Jane
Dear Jane,
This sounds like a desperate situation. Taking care of
elderly parents is hard enough -- my husband and I have also been down that
road recently. It's worse when parents need care, and they have run out of
money.
However, desperation doesn't turn wrong into right. The
question is not whether you will be liable for the debts, but what is the right
thing to do.
Let's run through this scenario: You take your father's card
to the drugstore to get things he needs. You either have your dad with you and
he signs the sales slip, or you have a power of attorney for him and you sign
it yourself. Either way, you influence him to sign or you sign on his behalf a
promise that he will pay back the balance.
If you use the $38,000 in available credit knowing full well
it will not be repaid, you're engaging in deceit. True, the credit card company
may never know you did it (although I wouldn't rule that out). But taking out a
loan or using credit with no intention of repaying is the same as stealing.
There has to be a better way to take care of your dad.
Fortunately, there is help available for elderly people who
run out of money and can't live on their own. And in your dad's case, with no
assets and very clear need on his part, it should be easier for him to qualify
for help than it would be for most people who own houses and other assets that
complicate matters.
The first thing you can do is look into Medicaid requirements in
Alabama. You can learn a lot just reading the website. However,
getting government help paying for an assisted living facility can be daunting.
If you and your siblings have been paying the assisted
living facility thus far, be aware you may have agreed to continue doing so,
either by contract or assumption. If you suddenly stop paying the facility before
Medicaid or other help is approved, you could be sued for the balance. For
example, in Connecticut, the courts held a son liable
for $100,000 of his mother's nursing home bill, even though the only
signature he put on the contract was as her power of attorney.
I also recommend
getting a good elder care lawyer on your side before you make any changes or
decisions. ElderLawAnswers.com has a database
of elder care lawyers to choose from. Look for one who specifically deals with
Medicare/Medicaid issues. This is one of those times where an expert can be
worth many times anything you pay them.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: June 18, 2010
Three most recent To Her Credit stories:
Should one spouse take on full debt load? – A married couple with joint card debt wants to transfer the balance to a lower rate card. Should the better credit score spouse take on the burden alone? ...
Can you use dad's credit card when he's ill? – An adult child is taking care of her dying father and wonders about the legality of using his plastic to pay for bills and medical expenses ...
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