Does my estate have to pay my medical debt?

Medical care is expensive. Even with health insurance, you may need to pay significant medical bills to support your healthcare during your lifetime.

In some cases, you may find that a facility will not treat you without a co-signer or family member who could be held personally responsible for your medical bill if your estate cannot pay it. Unfortunately, end of life medical care often creates significant, unanticipated medical expenses. This may leave outstanding medical bills as your loved ones determine how to settle your estate.

Here’s what you should know about the impact medical debt can have on your estate and the probate process.

Discovering the debts

After the personal representative takes an inventory of your estate’s assets, they will determine the valid debts and other financial obligations of your estate, including:

• Unpaid taxes
• Mortgages and car loans
• Consumer debt, like credit cards and personal loans
• Medical and doctor bills

In many cases, your estate is responsible for the valid debts you leave behind, including medical debt.

Your estate vs. your heirs

There is an important distinction between your estate and the distribution of remaining assets to beneficiaries or heirs. During the probate process, your estate must use available assets to pay the expenses of administration and valid debts. Typically, your estate must pay taxes before other valid debts such as medical bills.

Depending on the type of medical bill, there are occasionally times when someone else is considered personally responsible for the debt if your estate cannot pay the outstanding balance. Loved ones could be responsible for medical debt under specific circumstances, such as:

• Co-signed medical bills
• Medicaid estate recovery

These situations are sometimes complex and often stressful, so it is essential to talk to a skilled professional about how medical debt could impact your estate plan and the inheritance of your loved ones.