Author Topic: Question Regarding Medical Payments Demanded After Parent's Death.  (Read 2980 times)

Dicey

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Short version: Are the heirs required to pay for their parent's medical expenses after they die?

Longer summary:

In late 2014, both of my parents were admitted to a Skilled Nursing Facility, for different medical reasons.

Medicare covered some of their stays, their insurance (GEHA) may have covered some of it, and my parents paid out of pocket. (I know this, because I fronted them the money to cover these bills.)

They were both discharged in January of 2015 and Mom died soon after, in February, 2015. Dad died in March of 2016.

After several requests for detailed billing information, in August 2015 we received a $1400 refund for "overpayment" check from the SNF, with no details. ($400 for Mom and $1000 for Dad.)

The week after Dad died, in March of 2016, we received a demand letter from the SNF for my Mom in the amount of $4700 that was "Past Due", with no details. Of course it included the standard threat to take us to collections if payment was not received. We didn't pay it, as they'd already sent us a refund for overpayment. We did inform the SNF of my parent's deaths.

A year later, on May 18, 2017 (my mother's birthday, ouch) we got another demand letter from the SNF. This time it was for my Dad in the "past due" amount of $9500, with all the same threats.

All of my parent's assets went into a Trust and my brother and I are Co-Trustees & Co-Executors. We're working on settling the (small-ish) estate complete with other sibling drama worthy of the Inheritance Thread.

Our question for you fine folks is this: Are we obligated to pay these amounts? Where do we look for guidance? We don't want to spend what's left on attorney's fees, because the pile's not that big and there six kids and taxes owed. Their money was mostly in IRA's and they had no pass through provision, which another huge headache.

This is kind of a bare-bones outline. If you have any questions, I'll be happy to provide as much detail as I can. Oh, and they lived in CA and created their Will and Trust there, but Dad died in AZ, where he lived the last year of his life with my Co-Trustee brother.

I want to emphasize that we are willing to pay what is legitimately owed, but this facility's accounting practices are so opaque, that we feel they're trying to pull some funny stuff. Demand letters with no itemization of services rendered long after my parents are dead and "overpayments" are refunded? Sounds fishy to us.

Heaps of gratitude in advance to anyone who can help us solve this conundrum.


SimpleCycle

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #1 on: August 01, 2017, 02:08:14 PM »
I'm hoping that someone else has a more detailed answer for you, but my understanding is the estate can be responsible but you cannot be as individuals.  I have no idea how everything being in a trust influences that.  I would definitely not pay without an itemized statement.

ysette9

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #2 on: August 01, 2017, 02:52:00 PM »
I agree on the point about an itemized statement. I wouldn't pay anything without it. How are you to know if it is legitimate or not? If it is a legitimate charge, then I expect you would want to pay it from the estate. If not, then they can go pound sand.

PepperPeter

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #3 on: August 01, 2017, 04:05:11 PM »
Not an attorney, but a trusts and estates paralegal.

It varies by state law, but generally a debt of a decedent is paid by the decedent's estate.  Some states require that debts are satisfied by revocable trust if the estate is insolvent or an estate administration is not opened.  Their threat to take you to collections is irrelevant - that is not the proper procedure for a creditor to be paid from a decedent's estate (and would filed under your mom or dad's SSN and would never affect your individual credit).  You do have a fiduciary obligation as trustee of the trust and there is likely language directing the trustee to pay debts.

Personally, I would spend the money to talk to an estate attorney about this creditor issue. 

Drifterrider

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #4 on: August 02, 2017, 05:18:06 AM »
Not an attorney, but a trusts and estates paralegal.

It varies by state law, but generally a debt of a decedent is paid by the decedent's estate.  Some states require that debts are satisfied by revocable trust if the estate is insolvent or an estate administration is not opened.  Their threat to take you to collections is irrelevant - that is not the proper procedure for a creditor to be paid from a decedent's estate (and would filed under your mom or dad's SSN and would never affect your individual credit).  You do have a fiduciary obligation as trustee of the trust and there is likely language directing the trustee to pay debts.

Personally, I would spend the money to talk to an estate attorney about this creditor issue.

Personally, I would spend the estates money to talk with an attorney :)


MommyCake

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #5 on: August 02, 2017, 05:27:08 AM »
Talk to the lawyer who handled the trust.  Ask him/her to write a letter to the nursing facility requesting a detailed accounting.  He/she may even do it without billing you.

Dicey

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #6 on: August 02, 2017, 07:53:07 AM »
Lawyer who handled the trust is less than worthless. When we contacted him for copies of their fairly recently updated documents, he replied with "I gave everything to my clients. I don't keep any copies myself." Asshat.

And the trust document itself has been charitably described as "thin".

Sibley

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #7 on: August 02, 2017, 08:47:07 AM »
Another vote for talking to an appropriate attorney.

Also, please add stories to the Inheritance thread if you haven't already :)

Goldielocks

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #8 on: August 02, 2017, 02:32:01 PM »
The basics of inheritance :

The estate must pay for the bills of the deceased prior to distribution to the heirs.  It is a requirement of the executor to do due dilligence and not release final funds until a reasonable amount of time has passed to identify and clear the debts.  The executor must notify likely claimants of the death (as you have).   The reasonable time and methods to notify potential creditors will vary by state.

So.

At this time, you need to hold off on distributing assets to family members, but do not pay the medical bills until you get an accurate accounting.  I would deny that any money is owed, based on a prior refund, "dated xxxx, and notice of death provided to you on yyyy", and provide them with a minimum number of days (21?) to to provide proof in writing that any amount is owed, including an accounting of the refund. 

Let them bring on creditors / debt collectors.  They can only go after the estate.  (ok, and maybe the executor if the executor does a particularly shitty job, but not if a reasonable due dilligence job is undertaken...  I think there is insurance like directors' insurance against this sort of thing, too??).

MommyCake

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #9 on: August 03, 2017, 04:00:55 AM »
Lawyer who handled the trust is less than worthless. When we contacted him for copies of their fairly recently updated documents, he replied with "I gave everything to my clients. I don't keep any copies myself." Asshat.

And the trust document itself has been charitably described as "thin".

Wow, I'm sorry, that is bad.  Your best bet is probably spending a bit on another lawyer. 

Finances_With_Purpose

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #10 on: August 04, 2017, 03:00:40 AM »
Agree: see an attorney.  There's no substitute.  And most good ones won't venture to offer you what would be considered legal advice here - too risky.  They would, though, very cheaply, or maybe free (initially) if you made a consultation w/ one.  So find a good, reputable one.  It's your only good option here - and I hate telling people to see an attorney.  But if you don't, it may create even more mess down the line.  In short, the creditors know the laws and the game, and you don't....

Also, PepperPeter and GoldieLocks gave great answers, too, covering basics, but none of us can give legal advice w/o the particulars of your case/situation, even if someone were qualified to. 

As for records, who's the client?  In most states, an attorney is ethically required to provide a file to the client, and you may well be part of the client (executor of the trust/estate) as to him - that I'm less sure.  Anyway, you could try demanding the file AS the client (in writing) and see what he does.  He may want to forego the headache and obtain a copy of the documents for you.  Don't know if that'll work, as I don't know your status there, but you can always ask/try. 

Dicey

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #11 on: August 04, 2017, 11:22:07 AM »
On closer examination, the total demand is "only" for $9300 total. Hard to get an arrow eyes* [sic] involved for such a small amount. Close inspection with the help of my CPA reveals that Credit for Overpayment was issued several months after last insurance claim was processed. There is a line item and refund for each of my parents. We're strongly leaning towards ignoring this demand.

BTW there has never been an itemized bill for services provided by SNF, despite multiple requests.

Finally, FWIW, they have been paid in the vicinity of $80k, just to get an idea of what $9.3k represents.

* This is one of the better auto-corrects for "attorney" I've ever seen.

BFGirl

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #12 on: August 04, 2017, 11:31:41 AM »
On closer examination, the total demand is "only" for $9300 total. Hard to get an arrow eyes* [sic] involved for such a small amount. Close inspection with the help of my CPA reveals that Credit for Overpayment was issued several months after last insurance claim was processed. There is a line item and refund for each of my parents. We're strongly leaning towards ignoring this demand.

BTW there has never been an itemized bill for services provided by SNF, despite multiple requests.

Finally, FWIW, they have been paid in the vicinity of $80k, just to get an idea of what $9.3k represents.

* This is one of the better auto-corrects for "attorney" I've ever seen.

Another vote to speak with an attorney.  If you are an executor/trustee, you are considered a "fiduciary" and have an obligation to deal with (according to your state's laws) the debts and affairs of your parents' estates.  If you ignore this and the SNF takes you to court, you could find yourself or the estate liable for their attorney's fees in addition to your own.  NOTHING IN THIS POST IS MEANT TO CONSTITUTE LEGAL ADVICE.

Rosy

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Re: Question Regarding Medical Payments Demanded After Parent's Death.
« Reply #13 on: August 04, 2017, 03:41:27 PM »
Dicey - time to get a lawyer or at the very least have a discussion with one.