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What happens to my medical expenses after I die?

As you make plans to determine who will receive your assets after you pass away, there are some factors you may not be able to control.

In many cases, as people age their medical expenses rise. While you may be in good health now, you have no way of knowing what medical conditions you will face in the future, let alone the cost of treatment for those conditions.

This is what you need to know about your beneficiaries’ obligation to pay medical bills after you die.

The bad news is not all bad

Just like any creditor, medical service providers want to receive payment for their services. Unfortunately, patients often die before their medical bills are paid in full.

When it comes to distributing your remaining assets after your death, medical bills might receive priority status for payment. This means these bills would be paid before your beneficiaries receive their inheritance.

Florida Probate law allows creditors, including medical providers, to file a Statement of Claim in your Probate estate in an attempt to receive payment of your outstanding balances. For this reason, when you die your nominated personal representative (if you had a valid Will) or person handling your estate should hold off on paying outstanding unsecured debts, including medical bills, until receiving the advice of a probate attorney. In most cases, if no Statement of Claim is filed with the Probate Court by an unsecured creditor, the outstanding balance will not have to be paid from your remaining assets.

Keep in mind that debts owed to the government such as the IRS, federal taxes, and property taxes, and also secured debts such as mortgage balances on real property and car loans, are generally handled differently.  

Planning for the future

Take the time now to look at your current health insurance plan to see how much coverage you have and to determine your out-of-pocket maximum. Always discuss these matters with a qualified estate planning attorney. While we all hope to live a long and productive life, you just never know when your life will come to an end.

Keep in mind that there are circumstances when a creditor could seek payment from your family members or others. The most important instance to be aware of is when someone co-signs on a loan. Regardless of the purpose of the loan, if someone has co-signed on your loan they are equally responsible for the debt even after you die.

When you develop your individual estate plan with a knowledgeable attorney discuss any outstanding or future medical expenses and your other debts. While your beneficiaries generally will not be personally responsible for repayment of your debts after you die, the requirement to pay validly-claimed debts could reduce the amount of their inheritance.

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