When a loved one dies after an illness that requires lengthy health care, the unpaid medical bills can be huge. Who is responsible for hospital bills after death? Do medical debts die with you? These are common questions our office receives and are often concerns that worry family members of a deceased person.
In Georgia, many people may believe they are legally obligated to pay a deceased person’s medical creditors.
This blog post explains what Georgia probate law says in this regard and what the exceptions might be.
Generally speaking, Georgia probate law states that only the deceased’s estate is responsible for the decedent’s unpaid medical bills.
Debts typically go unpaid if the estate has insufficient money or assets. That means the surviving spouses are usually not required to cover the medical debt of the late person— but there are some exceptions.
The most significant way a surviving spouse can be responsible for the hospital bill after someone dies is if they signed something while at the hospital accepting responsibility for them.
Often, family members aren’t even aware of what they signed up for when their loved one was hospitalized, so they often don’t know if they agreed to pay for the medical care. Therefore, it is worth investigating the signed documents to know for sure if you are liable.
If you accept responsibility for the bills, then the medical provider can personally pursue you to collect them in the same way as if you were the patient.
A far more common way that the family is affected by the deceased’s unpaid medical debt has to do with the probate estate itself and the way the property is held (more on that below).
If someone dies in the hospital, who pays the bill, who is responsible for hospital bills after death? That depends on many factors, including the Georgia law on paying medical bills.
When someone passes away, they can leave an inheritance, which generally includes all the assets and money they owned at the time of death. If the deceased person had unpaid bills, these would be paid from their estate, either through bank accounts they held or by selling their assets.
Typically, two situations can occur:
When there is a testament, an executor (someone designated in the deceased’s will to handle their affairs) will be responsible for ensuring the bills get paid out of the late spouse’s estate. In cases where the dead person didn’t have a will, the probate court may appoint an administrator or someone else to do the job.
Once the court has designated a personal representative, he must run a debtor/creditor ad in the newspaper for four concurrent weeks to inform creditors that the estate has been opened.
In Georgia, a system dictates which debt you should pay first. It goes from 1-8, with 1 being the first creditor to pay and eight being the last. The executor must prioritize the payment of the debts according to the state probate laws:
The executor or administrator may be compelled to pay with their own money when they don’t follow the creditor list correctly.
When they believe they can reasonably claim assets (eg, property, money) in the deceased’s estate, debt collectors can try to force open probate. They can also place liens on assets in the deceased’s name to collect the person’s debts once that asset is liquidated. They can only attempt to recover what they are owed from probate assets.
The law prioritizes using the late person’s assets to pay their debts. If there are no liquid assets, you may be required to sell real estate or other property to ensure that creditors are satisfied. The estate may be considered insolvent if there aren’t enough assets to cover the deceased person’s debts.
The heirs and beneficiaries will not be responsible for settling these debts, but this also means they won’t receive any inheritance from the estate.
Some assets may name designated beneficiaries listed on them before the deceased passed away, negating the need for a will or the formal probate process to transfer the asset. These are often described as non-probate assets.
The probate court process or the will does not govern them, and they are not subject to creditors’ claims. This means a creditor cannot force the recipient to use non-probate assets to pay an estate debt.
No, unless they signed documents agreeing to cover medical debt or otherwise accept financial responsibility for the late person’s medical debt.
Georgia probate law generally states that only the deceased’s estate is responsible for the decedent’s bills, not the surviving spouse.
Once someone dies, all their property, other than joint or beneficiary-designated accounts, becomes available to creditors through the probate process to pay debts owed by the deceased.
As a result, if the late person owned the family home and the surviving spouse was not a joint owner, then the hospital and other creditors can force it to be sold to pay their debts. The same principle applies to bank accounts, vehicles, investment accounts, and any other property that goes into the estate.
Georgia probate law provides surviving spouses a spousal support option called year’s support. It places them in a higher priority position than the creditors, so they get paid first. Year’s support is a complicated process, and you only get one shot to get it right, so we strongly recommend hiring a qualified probate law firm to assist you.
As a rule, all unpaid debts should be collected from the deceased person’s assets before heirs receive their share. If there isn’t enough money to cover financial claims, creditors may look for someone else to pay the bills. But, in most cases, no one is legally obligated to use their own money to pay off a deceased person’s debts.
Although family members are typically not responsible for their loved one’s debts, they can also be liable if:
Estate planning in Georgia helps to accomplish several important purposes. It allows individuals to protect their assets, plan for the distribution of their estate after death, appoint guardians for minor children and ensure their wishes regarding medical decisions and end-of-life care are followed.
However, as it is a very complex process, we strongly recommend consulting an experienced estate planning lawyer.
After a person dies, the personal representative should run a creditor/debtor ad in the local newspaper for four concurrent weeks. Once the ad has run, they must keep the estate open in the probate court for at least three months to allow any creditors to come forward to file their claims.
Anyone with a demand can directly contact the executor or administrator or submit it through the probate court.
Creditors can file their claims as long as the estate is open and before their applicable statute of limitations expires.
If you believe the request is invalid, you may have the opportunity to dispute it. The disagreement can be brought to court before a final decision is made on whether to pay the person or entity.
Medical debt doesn’t disappear when someone passes away. In most cases, the deceased person’s estate is responsible for paying any debt left behind, including medical bills. Usually, the deceased debts will be paid out of the person’s estate. But if the decedent didn’t leave sufficient assets to cover all their debts, creditors may look for someone else to pay.
If a debt collector contacts you about your late loved one’s medical debt, it’s important to know your rights and responsibilities.
Learn Important Probate Essentials, including key things that go wrong in an estate, how to prevent them, and what to do if they happen.
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