Expert: Charles W. Field - 2/23/2004

Question
Hi Charles:

I am in Georgia.  My Father passed away five years ago.  My Mother just had a relatively bad stroke and all of a sudden my siblings and I are tasked with figuring out her financial situation and where best to put her limited financial resources.  One of the items we are discussing is whether to continue an expensive insurance policy that covers medical and hospital bills in case of a catastrophic event that would require an extended hospital stay.  
If she were to have such an event without the insurance could the hospitals, etc. come after her children and hold them liable for the unpaid bills?  She currently owns a house and has a little bit of cash in the bank.  Would the hospitals, etc be able to attach to the small assets?  What if we divest her of these assets now by putting these in the children's name, does this change the liability?    Thanks for your help!   Mike

Answer
If she divests herself of her assets, no one can come after them, unless (which I doubt) they wanted to spend the time and money to try to prove she took that action to avoid creditors. I would suggest you consult with a financial advisor who is willing to give you a written opinion that putting the assets into the children's names is sound estate planning (i.e., to avoid these assets having to go through probate once she passes away). BTW, unless the children signed a guarrantee for her medical and/or hospital bills, they couldn't be held liable for those.