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?
Seems like a bad idea on the face of it.
What am I missing.
On Thursday, May 14, 2015 at 12:12:38 PM UTC-4, (PeteCresswell) wrote:
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
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
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.
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
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.
A decent lawyer, maybe? :)
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
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.
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!"
On 05/14/2015 3:16 PM, firstname.lastname@example.org wrote:
Not sure I get the intended meaning here, but...
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.
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.
That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
My problem with the Estate Tax is that it is not a revenue raising tax,
never really has been. Even the supporters note that the main reason for
it is that people shouldn't be able to keep family money above a certain
level that offends the writers of the tax. To keep dynasties from
forming. Yeah, like the Rockefellers, Kennedys, etc. are all destitute.
It is an artificial event from a tax standpoint.
Personally I would do away with the estate tax, but also do away
simultaneously with cap gains ramp up at death. So any capital gains
taxes (really the only tax that makes sense in this context) would only
be collected when somebody sold the item (be it stock, family farm, etc)
and it wouldn't matter if the seller was first generation or 12th.
?Statistics are like bikinis. What they reveal is suggestive,
but what they conceal is vital.?
Of course Obummer has a different idea: keep collecting the death tax AND
eliminate the step up in basis for those who paid the death tax. I don't
even know how many whammies that is, but it is sure more than a double
My "problem" so to speak isn't "family money" but more related to
capital assets, etc., of family businesses and the like. Think of the
land value that is tied up in a working farm as just a common example
and the one the Farm Bureau particularly is concerned over. Owing to
the recent land evaluations it doesn't take much in some areas of the
country before one is in the bind and then family succession is often
difficult or even impossible since despite the on-paper valuation,
there's often nowhere near enough liquid assets nor cash flow to be able
to handle it. Consequently, land ends up having to be sold to pay
taxes. That "just ain't right!".
I don't know about that one...haven't really pondered it deeply enough
but on first blush I'm sorta' ok that needs to be a step up in basis
somewhere, somehow, any way.
On Thursday, May 14, 2015 at 3:48:42 PM UTC-4, J Burns wrote:
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
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".
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