Would an executor lose his house if the medical bills of his parents couldn't be paid?
The answer depends in part on what type of power of attorney was created by your in-laws. If they executed "regular" power of attorneys, that power of attorney may not be enforcable anymore if the parents are incapaciated.
Durable Power of Attorney is a legal document that enables the grantor (Principal) to designate another person called the agent or attorney-in-fact to act on behalf of the Principal, even in the event the individual becomes disabled or incapacitated. Therefore a "durable" power of attorney stays valid even if the Principal is not able to handle his or her affairs (incapacitated). Usually a power of attorney becomes ineffective if its grantor dies or becomes incapacitated. If the grantor does not specify that that the power of attorney is to be durable, it will automatically end when the principal becomes incapacitated.
If a regular power of attorney is no longer valid, family members can petition the probate court to be appointed conservator of the incapacitated parents. A conservatorship is created by the appointment of a conservator, also sometimes called a guardian. A conservator is a person or entity appointed by a court to manage the property, daily affairs, and financial affairs of another person, usually someone who is incompetent by reason of a physical or mental infirmity or age. For example, an adult daughter may be appointed as the conservator for her father who is suffering from advanced Alzheimer's disease. An open hearing is held before the appointment is made. The conservator is required to make regular accountings which must be approved by the court. The conservator may be removed by order of the court if no longer needed, upon the petition of the conservatee or relatives, or for failure to perform his/her duties.
Once a court has jurisdiction over a conservatorship that jurisdiction continues until it is terminated by the court. If the ward moves to another state, the conservatorship is not automatically terminated. However, it is often recommended when a ward moves to another state that a guardianship or conservatorship be established in the other state to ensure that the guardian's or conservator's authority will be recognized by the other state. Also, it is difficult for a court to supervise such a guardianship or conservatorship when the fiduciary lives outside the state.
Executors and administrators are the representatives of decedents' estates and have the responsibility of administering and settling those estates. An executor is nominated by the testator for the purpose of executing the will. Responsibilities include gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are calculated, forms filed and tax payments made, and in all ways assisting the attorney for the estate. An administrator is the court-appointed representative of an intestate estate and is responsible for administering and settling the estate pursuant to the state statutory rules of descent and distribution. Responsibilities include gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are calculated, forms filed and tax payments made, and in all ways assisting the attorney for the estate.
Executors do not use their own assets to pay the bills of an estate. Therefore, it is unlikely that their assets would be affected by the inability of the estate to pay its bills.
If a creditor of the estate puts a lien on real estate owned by the estate, it will get paid from the value of the property. The creditor will not be able to pursue a personal action against beneficiaries of the estate. Although the value of the estate may be diminished when bills are paid.
If you are concerned about the length of time that they will require nursing care, etc., you may wish to explore applying for Medicaid assistance. The qualificiation process is quite complicated, particularly if there is a homestead. Getting advice from an Elder Law or Medicaid attorney would be highly recommended.
Medicaid is a medical assistance program jointly funded by state and federal governments for low income individuals. It was originally enacted as part of the Social Security Act of 1935. Today, Medicaid is a major social welfare program and is administered by the Health Care Financing Administration.
Medicaid covers in-patient hospital services, out-patient hospital services, laboratory and x-ray services, skilled nursing home services, physicians' services, physical therapy, hospice care, and rehabilitative services, and other services. Patients must select from pre-approved physicians and other providers of medical care. Medicaid eligibility is not restricted by age or employment