Every will I have seen so far contains boiler plate to the effect that the executor is directed to immediately pay all medical expenses.
Seems counter-intuitive to me. Why not directives to pay all lawn-maintenance expenses? All utility bills?... and so-forth.
What is so special about medical expenses - except for the potential for a feeding frenzy by caregivers plus the huge difference between insurance/Medicare payments and actual charges?
I just happen to have Quicken Will Maker on my PC. Just took a look and they have nothing specific to medical expenses. It just directs the executor to pay all debts and expenses consistent with NJ law. I agree with your assessment, I don't see any good reason to give priority to medical debt over any other debt. I don't recall seeing that in my previous wills either. It's probably not even legal. If you only have $20K in net worth, why should it all go to medical expenses, versus being shared among all legitimate debts? I would think the other creditors could sue and win. There is probably some state law that governs that executors have to proceed fairly, equitably under that circumstance.
I have been both an executor and a trustee and I have never seen anything that speaks specifically about paying medical expenses. What I have seen is something like "to pay all debts and expenses required by law". Of course, the norm may be entirely different in other parts of the country.
Only thing I can think of is the potential for abuse if the person had huge bills at the end and the family just figured "screw the doctor, dad died anyway".
In reality, all bill should be settled but you are more likely to pay off a $60 phone bill than a $50,000 hospital bill.
My mother recently past and with no will I hadda get an attorney and am currently going thru probate. I payed all of her outstanding medical bills from her estate assets, as per my attorney's instructions.
Perhaps you are being dinged for her debts cuz her estate has no assets. You know those debtor dirtbags are gonna try and get their money from someone. Ima geezer ona fixed income, so am far from well off. Still, I consulted and hired an attorney. An attorney would be able to tell you if the outstanding debtors have any claim or are they jes trying to scam you.
IANAL but both parents have deceased and served executor for both; plus both of wife's are deceased and while didn't serve myself am quite familiar with their cases. None have had such a specifying any specific expense nor time frame; only the generic of "all legitimate claims and expenses" or somesuch.
I don't see that in a practical sense it has any actual effect altho the time pressure of "immediately" would be _quite_ unusual I would think if that's really in there.
The estate will owe what it will owe and is obligated in good faith to make good on those legitimate claims that there are.
In the case of limited assets and very large liabilities as another has posted, I'd guess it'd probably end up in the probate court assigning how those might be divied up. If there are sufficient assets and the outstanding debts aren't just humongous it's pretty much generally kinda' like "business as usual" except the executor or administrator is writing the checks once receives that authority instead of the individual previously.
The thing w/ lawyerese and all is that it's the words that matter and without the precise wording itself but a paraphrase it's basically meaningless. But, as noted, I'd think those specific conditions wouldn't be in 1% of wills taken as a whole.
I just noted that mine says first to pay all just debts and funeral expenses. Guess they included funeral expenses since they will not incur until after I die.
I tell people that doctors will not let you die as long as you still have money.
In the three states I've dealt with specifically, there was no distinction on _who_ or _what_ ; but the general rule that all expenses are paid first before the rest is divvied up amongst the rightful heirs is a given, yes.
If there's something left, good; if not, well, "too bad, sorry!"
If medical professionals don't use extreme measures and perform them flawlessly, they'll certainly be sued. Seems to me if we demand perfect service from them, we had better pay them first.
So when grampa tips over from a coronary and you don't want huge medical bills, think carefully about who you call.
Uncle Sam wants his share before the children get some. Tax a dead man. The selfish bastard. Spit! ...
Only if estate > approx. $5.4M (or twice that for joint as that's individual exemption. If one has that size of estate; best be gettin' the planning done now rather than just waiting for the time.
If it was taken and the work order signed before death, then "yes, the estate owes the tab" when the work is completed unless somebody stopped work in time to prevent there being an expense accrued.
Whether the owner ever drives the vehicle again or not is immaterial.
NJ? It's that everywhere. How could you possibly file an inheritance tax return or anything to do with the disposition of the assets of the estate, until you know the amount of all the outstanding debts?
Medical expenses can be especially complicated. A payment under the New Jersey Death act for medical and similar expenses is added to the estate. A judgment may be awarded without specifying the amount. Anything paid by no-fault insurance must be subtracted from medical expenses. Whatever was paid or reimbursed by Medicare or other medical insurance cannot be deducted. Whatever was paid before death cannot be deducted.
It sounds like a lot for a lawyer to sort out, so the boilerplate tells the executioner to get on the stick.
The "executioner" has already done his part...else't there wouldn't be no estate. :)
What do you mean by an "inheritance" tax return, anyway, specifically? An inheritance isn't taxable. You mean the final estate return?
If so, nothing there sounds like anything out of the ordinary to anywhere else; expenses and income still may accrue for quite some time after the instant of passing.
It's not at all unusual for even a relatively simple estate to take a year or more before it's settled; I still think any clause that says anything about doing _anything_ immediately is pretty much bogus. Now, maybe the sample wording came as a "service" from a medical service provider "just being helpful".
What's the NJ Death Act? I googled, found nothing. And what payment, from whom and for what exactly are you talking about that gets added to the estate? I've never seen payments for medical bills by Medicare or insurance treated as income.
If the person is elderly, under Medicare, then Medicare pays most of the medical bills, supplemental insurance or the estate would pay the rest. I don't see why anything would be "added to the value of the estate. A judgement? For what? Where did that come from?
AFAIK, in NJ an estate is handled the same way it is anywhere else. You total up the assets, pay out the bills due, including any final income tax, the money gets divided up among the heir per the will, any state or federal estate tax is paid.
HomeOwnersHub website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.