Do Final Medical Expenses of the Deceased Need to be Paid?
Full Question:
Answer:
Generally, the medical bills are required to be paid if there are assets to pay them. State law provides that funeral bills are to be paid ahead of final medical expenes. The executor named in the will (or administrator in the deceased died without a will) will be granted authority by the court in the probate process to handle the decedent's affairs, such as paying debts owed and distributing their assets. It is the executor's responsibility to collect and distribute the property of the decedent and pay the decedent's creditors.
A deceased's debts should be paid with the property in their estate (the property left at their death). Heirs don't inherit the decedent's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt so that the heir's name is on the debt also, and it isn't a separate debt Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. Be advised that when an heir inherits property that is collateral for a debt -- for example, a car that is not paid for or a house with a mortgage -- the debt comes with the property.
Courts have held that property owned by husband and wife as tenants by the entireties may not be sold to satisfy the debt of only one spouse However, property held as joint tenants who are not tenants by the entireties, may be sold to satisfy the a sole debt of one owner, up to the amount of that debtor's equity in the property. The non-debtor owner will receive the balance of his share of equity in the property from the sale.
If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that if the deceased died with little or no money in their accounts and didn't own a home, unsecured debt such as credit card debt will not be paid to the creditors.
The administrator has a duty to act in a trustworthy and authorized manner in handling the estate of the decedent. If the administrator acts outside the scope of his/her authority, in bad faith, or against the wishes of the decedent, the administrator may be personally liable.
Please see the following MN statutes:
524.3-805 Classification of Claims.
(a) If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:
(1) costs and expenses of administration;
(2) reasonable funeral expenses;
(3) debts and taxes with preference under federal law;
(4) reasonable and necessary medical, hospital, or nursing home expenses of the last illness of the decedent, including compensation of persons attending the decedent, a claim filed under section 256B.15 for recovery of expenditures for alternative care for nonmedical assistance recipients under section 256B.0913, and including a claim filed pursuant to section 256B.15;
(5) reasonable and necessary medical, hospital, and nursing home expenses for the care of the decedent during the year immediately preceding death;
(6) debts with preference under other laws of this state, and state taxes;
(7) all other claims.
(b) No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due, except that if claims for expenses of the last illness involve only claims filed under section 256B.15 for recovery of expenditures for alternative care for nonmedical assistance recipients under section 256B.0913, section 246.53 for costs of state hospital care and claims filed under section 256B.15, claims filed to recover expenditures for alternative care for nonmedical assistance recipients under section 256B.0913 shall have preference over claims filed under both sections 246.53 and other claims filed under section 256B.15, and claims filed under section 246.53 have preference over claims filed under section 256B.15 for recovery of amounts other than those for expenditures for alternative care for nonmedical assistance recipients under section 256B.0913.
524.3-807 Payment of Claims.
(a) Upon the expiration of the earliest of the time limitations provided in section 524.3-803 for the presentation of claims, the personal representative shall proceed to pay the claims allowed against the estate in the order of priority prescribed, after making provision for family maintenance and statutory allowances, for claims already presented which have not yet been allowed or whose allowance has been appealed, and for unbarred claims which may yet be presented, including costs and expenses of administration. By petition to the court in a proceeding for the purpose, or by appropriate motion if the administration is supervised, a claimant whose claim has been allowed but not paid as provided herein may secure an order directing the personal representative to pay the claim to the extent that funds of the estate are available for the payment.
(b) The personal representative at any time may pay any just claim which has not been barred, with or without formal presentation, but the personal representative is personally liable to any other claimant whose claim is allowed and who is injured by such payment if
(1) the payment was made before the expiration of the time limit stated in subsection (a) and the personal representative failed to require the payee to give adequate security for the refund of any of the payment necessary to pay other claimants; or
(2) the payment was made, due to the negligence or willful fault of the personal representative, in such manner as to deprive the injured claimant of the claimant's priority.