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Information on Creditor Claims on Estate

Can outstanding medical bills be used against you in your estate?

Can outstanding medical bills be used against you in your estate?

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Updated: Oct 20, 2014

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Highlights

  • An executor or administrator guides an estate through the probate process.
  • Consult with a lawyer who has experience in wills and estate planning to create a will or trust.
  • A lawyer with probate experience can help an estate's administrator or executor.

Generally speaking, any outstanding debts you owe, including medical bills, can file a claim against your estate in the event of your death. For example, if you pass away leaving a large sum of money and a property to your heirs, the executor of your estate has a duty to pay any creditors that make a legitimate claim against your estate before distributing your assets to your heirs. The process in which your estate goes through probate and how creditors are allowed to file claims is governed by your state law, and can vary significantly from state to state. For example, many states allow all assets to pass to a surviving spouse without going through probate, with all claims deferred until the death of the surviving spouse.

Given the complexity of estate law, and the negative consequences that can result from improper planning, I strongly encourage you to consult with a lawyer in your state who has experience in wills, estates, and estate planning. An attorney should be able to tell you how your state’s laws may affect any claims your creditors may have against your estate, and can also help create a strategy to protect your assets to the maximum extent from creditors and taxes.

For general information regarding the preparation of a will and planning your estate, you may want to visit www.nolo.com. However, while this information can be helpful, general advice such as that offered by Nolo is no substitute for the professional guidance of an attorney who is familiar with your financial situation.

I cannot emphasize enough the importance of retaining a qualified attorney to guide you through the estate planning process; estate law is not something a laymen should navigate without professional assistance. I wish you the best of luck in your efforts to protect your estate, and hope the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

9 Comments

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  • RB
    Mar, 2011
    Rita
    I am trying to determine wht the creditors claim procedure is in NY and whether the filing of the claim by itself, without following up with anything such as a lawsuit will protect the creditor for the long term.
    1 Votes

    • BA
      Mar, 2011
      Bill
      I assume from the context of your question that you are asking about a probate situation. Consult with a New York lawyer who has experience in probate law.
      0 Votes

  • ME
    Mar, 2011
    Myles
    i live in the state of Nevada and i am the administrator to my fathers estate, what happens if a claim is filed against the estate and theres no assets to pay for the claim.
    0 Votes

    • BA
      Mar, 2011
      Bill
      If an estate is insolvent, then any claims against it go unpaid. There is no feudal debt bondage in the US — in general, the debts of a family member belong to his or her estate only, and are not passed to heirs or other relatives. However, in community property states, the rules may be more complicated if the decedent was married. Nevada is a community property state. If your father was married at the time of his death, then consult with a Nevada lawyer who has experience in probate law.
      0 Votes

  • BA
    Aug, 2010
    Bill
    A cursory search of North Carolina cases reveals the answer is probably yes. See North Carolina Department of Health and Human Services v. Thompkins, 2010 N.C. App. LEXIS 1153 (July 6, 2010). Consult with a North Carolina attorney who has experience in wills & estates or probate law for a precise answer to your question.
    0 Votes

  • 35x35
    Aug, 2010
    CJ
    THE STATE OF NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE submitted a claim against deceased estate after notice to creditors deadline which stated claims received after given date will be pleaded in bar of their recovery. Clerk of court sent letter advising claimant that bill was not sent in timely fashion and estate is closed from probate (only assets of deceased is house). Will medicaid claim have to be paid?
    0 Votes

  • 35x35
    Jan, 2010
    ehna
    This is a very informative site.
    0 Votes