When a loved one passes away, there are always a lot of emotions involved and plenty of final arrangements to make. But to make matters worse, the executor of the estate has to determine how the final bills of the estate will be paid. Any family members who were waiting on an inheritance will have to wait a little longer until the debts of the deceased are taken care of. Those debts always include the final medical bills.
Medical Debt Can Pile Up
It is not unusual for someone living through their final days to create a stack of medical bills that may or may not be covered by insurance. Even if the bills are covered by insurance, there will still be co-pays and other out-of-pocket expenses that will add up quickly.
Assets Of The Estate
When an estate goes through probate, the probate court determines the value of the estate and compares that to the estate’s final bills. Before any beneficiary gets their inheritance, the bills of the estate must be taken care of first. Probate courts often determine that the assets of an estate must be liquidated (sold) to add more money to the pool that can be used to pay back creditors.
Each state has its own way of determining which creditors get paid back first after someone passes away, and medical bills are normally at the top of that list. If the estate’s assets equal $50,000.00 but the estate’s debts are $75,000.00, then that $50,000.00 is used to pay back as many creditors as possible until it runs out. Any creditor that did not make the top of the list to be paid will not get their money.
The most common type of creditors that wind up losing out when an estate is liquidated are credit card companies. It is not uncommon for an estate’s medical bills to be paid in full, while the credit card debt goes unpaid.
Is Anyone Else Responsible For Those Bills?
If the estate does not have enough assets to pay its medical bills, then that would be the end of it. In most states, the family of the deceased would not have to pay back those bills. The only time this is not true would be accounts where family members were co-owners. For example, if someone co-signed a loan with the deceased, then that person would be responsible for the loan after the deceased’s estate was finalized.
If a person’s estate cannot pay back all of its final medical bills, then the rest of the bills usually go unpaid. Surviving family members, in almost every situation, are not asked to pay back medical bills unless those family members were, in some way, legally tied to those bills and responsible for them after the deceased has passed on.