Who Is Responsible For Medical Debt After Death?

Thinking about medical debt after death will be on the minds of those closest who are left behind to handle affairs. There are so many emotions and financial questions that come up after the death of a loved one it makes sense to develop a plan of action before a stressful event like this takes place.

The basic question that needs an answer here is who will be responsible for a medical debt after the debtor dies? Here is the short answer; the estate of the deceased person is liable for the medical bills and debt of that person.

Relatives are not personally liable for the medical debt of someone else. Not only is the deceased estate responsible for medical bills but also mortgages, credit card debt, or other personal debts. If the debtor dies with out any assets, those debts may go unpaid.

Who Pays Medical Debt After Death

Even though you may not appear to be personally responsible for someone else's debt, there are exceptions where you may have some liability. For instance, if you made an agreement beforehand that you are going to be responsible for a particular medical bill for the deceased, then you may be responsible. This would very likely be the case if you were a cosigner on a loan taken for medical debt for someone who needed treatment they would not have otherwise been able to afford. If you were the guarantor, then you may ultimately be responsible for paying off that medical bill.

Even though legally you may not be responsible for the medical bills of someone close to you who has passed away, this may not stop collectors from calling you trying to recoup their money. If you have any doubt as to who is responsible for the debt or questions about the debt it may be time to contact an attorney, give them the facts, and get an opinion. An attorney with experience in medical debt collections should be able to give you sound advice on how to properly handle collection calls and letters.

If the deceased person did have assets when they died those assets will now become part of their estate. The estate may need to sell off some or all assets and use those proceeds to pay off debts. If the person died and left a large medical debt liability expect those assets to be directed first toward payment of the medical bills and debt before it gets disbursed elsewhere. Put bluntly, this means that anyone who is scheduled to receive money from the estate needs to understand the total estate value will be reduced by the amount spent to pay medical bills.

Another part of the process after someone passes away is called probate. This is the legal transfer of ownership and title of an asset from a deceased person's estate to the beneficiaries that are outlined in the will. An executor will handle this transfer which typically also has involvement of the court system and attorneys. Remember that any court and attorney fees will also need to be paid out of the estate funds.

Death With or Without Assets

To summarize, if a relative passes away and has no assets then you're not going to be liable to pay any of their debts, whether medical or personal in nature. If collectors start to contact you, simply send them a copy of the death certificate and a statement that the person had no assets. If they continue to harass you, you should consider consulting an attorney who as a first step could send them a letter asking them to stop harassing you. Any continuation may require further legal action be taken on your part.

As for medical debt after death when someone does have assets, you should expect the estate to proceed through the probate process in order to allow property to be sold off to generate the cash to pay off debt. Anything left over will then be split among the beneficiaries listed in the will. Of course, this legal process is not always as simple as it sounds so you will mosy likely need the services of an attorney. Ask questions along the way to make sure that you understand the process so that there are no surprises.