Medical bill debt, death and probate
January 23, 2012 3:22 PM   Subscribe

News and debt filter: Can somebody tell me why it was necessary to have a fundraiser to pay US medical bills for a deceased person? In the USA, if you die with debts greater than the total sum of your assets, your estate is generally liquidated in probate, right? Medical debt collectors can't go after your family for debts they didn't incur...

I was reading this news article about a Canadian skier who died after incurring massive medical bills in the United States.

Why was it necessary to have a fund raiser to pay the medical bills? Aside from the ethical issue of whether the hospital would get paid in full by the assets of her estate, how is there any possibility that her family would be liable for this debt?

You are not my lawyer, this is not legal advice, etc etc... I'm not asking a question for myself, just to improve my general knowledge of US probate law.
posted by thewalrus to Law & Government (11 answers total) 3 users marked this as a favorite
The skier's estate probably has significant assets that the family would prefer not get used for medical expenses if they can get someone else to pay for them. Especially if those assets aren't very liquid.

Also in this case it is the agent who did the fund raising. They may have been being altrusitic or they may be expecting a payout from the estate.

Finally last I heard in this specific case it isn't even clear whether the skier had insurance or whether she was supposed to have insurance and the agent screwed up. If the latter they would have significant motive to make sure the estate is held liable for any medical expenses.
posted by Mitheral at 3:31 PM on January 23, 2012

IAAL and in my state, the medical bills of a decedent are owed by the estate, not the family, unless the decedent is a minor, in which case the bills are the obligation of the parents.

Having said that, it may be that the fundraiser was to protect the assets in the estate for the heirs. Other than that, there is not enough information to really analyze this situation.
posted by mygoditsbob at 3:34 PM on January 23, 2012 [1 favorite]

Note, that even if the estate, and not the heirs are liable, if, say, the family home (or the kids' college fund) was in the name of the deceased, the family might want to go to great lengths to avoid liquidating that -- especially in today's climate. Alternately, some families feel a moral responsibility even where there is no legal one.
posted by tyllwin at 3:56 PM on January 23, 2012

in my state, the medical bills of a decedent are owed by the estate

This is true in my state as well. I am also not a lawyer but I'm the executor of an estate right now and part of my job is making sure that all the outstanding debts of the estate are taken care of. This does NOT mean that I pay them personally but that I pay them with the assets of the estate if there are any. It seemed clear from reading the article that the fundraiser was being held because the insurance the skier held via her association didn't seem to cover the injuries she received from that event [meaning she was paying full price] and that the reason they were raising the money, as they said in the first sentence, was to not "create a financial burden for her family."

As I understand it, you are correct, if her debts were larger than her estate, they can't go after the family unless they were owning certain assets like a home or an investment account in common [which might not go through probate -- if you own a house with someone depending on the title, the house just becomes the other person's, you don't have to wait until the estate is settled]. This sort of situation is not that unusual in a situation where there is a young person with a lot of money [or a much older person with a younger person helping manage their money] and it's unclear what the specific situation is in this case.
posted by jessamyn at 4:01 PM on January 23, 2012

Another issue might be that she was a Canadian citizen in US healthcare. Where was she resident?
posted by brokkr at 5:41 PM on January 23, 2012

It appears she was married. Therefore under most state laws, a surviving spouse would be liable for her medical bills. This is not true, generally, of other types of debts. News reports indicate the husband was named the beneficiary of the donations, which supports the conclusion that it's being den to avoid him being the on the hook.
posted by webhund at 5:55 PM on January 23, 2012 [3 favorites]

2nding, a spouse would be financially responsible.

I may be taking a strange angle on this, but is there a publicity component to this, perhaps someone taking an opportunity to play up the fact that a well known, popular and far from destitute person having major medical issues in the US wound up under-insured?
posted by randomkeystrike at 7:29 PM on January 23, 2012

Response by poster: Ehh. I have no agenda - I didn't know her or the family, I don't ski, and I don't have any big medical bills. However, there have been multiple stories recently published in Canadian media where people go on vacation to the US, or on a trip for work to the US without medical insurance and wind up in huge financial holes. I'm a Canadian that's curious how this sort of debt works in the US legal system.
posted by thewalrus at 7:37 PM on January 23, 2012

The fundraiser is probably so the husband doesn't lose everything paying the bills.
posted by elizeh at 7:51 PM on January 23, 2012

Actually - I thought that for emergency, non-elective medical care our Canadian health-care system actually would reimburse the US hospital.

However, upon checking that - it seems that our Harper conservative government has changed things since I was a kid.

Well - the debt "works", because collection agencies are multi-national and can ruin your rating across borders these days... Legally, I don't know how they would actually be able to collect through the court system from out-of-country.
posted by jkaczor at 9:19 PM on January 23, 2012

Well - the debt "works", because collection agencies are multi-national and can ruin your rating across borders these days... Legally, I don't know how they would actually be able to collect through the court system from out-of-country.

Collecting international debt is inconvenient, but I suspect it wouldn't be too hard for an American insurance company to get a judgement in a Canadian court.
posted by atrazine at 9:51 PM on January 23, 2012

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