Is an Agent Liable for Nursing Home Bills When the Principal Dies?
Full Question:
Answer:
Generally, the agent under a power of attorney is not liable for the debts of the principal unless the agent acted outside the scope of her authority. For example, if you contracted with the nusing home to have her placed there and you were without authority to do so, then it may be possible you could be liable.
Generally speaking, relatives are not responsible for the debts of a deceased relative. However, there are some exceptions:
- Anyone who co-signs or guarantees a debt remains liable even after the death of the other debtor. So, for example, if both parties sign a note, both remain liable for the debt even though the proceeds of the note benefited only one of the parties. A relative may also be responsible for hospital or nursing home care of a deceased relative because of contracts signed by the relative in their personal capacity when the decedent was admitted. But if a contract was signed with authority and in representative capacity as agent, then personal liabilty should not be created.
- A person who uses a credit card may be liable for those charges on the card even though the person's name was not on the card or the account.
A deceased's debts should be paid with the property in their estate (the property left at their death). Family members don't inherit their relative's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt, so that the relative'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 a relative 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. 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 relative died with little or no money in their accounts and didn't own a home, unsecured debt will not be paid to the creditors.
