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What Advantage is there in NOT paying Estate Creditors?

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yZenhymer

Junior Member
CA

Q: What advantage or disadvantate would NOT paying Hospice or HMO bills and waiting for these creditors to file a claim against the estate?

Our Attny's paralegal suggested that we stop paying any of my mother-in-law's (MIL) medical bills, which are nearly $8K. At least not until my wife is declared Executor of the Estate.

I wouldn't want to do anything that would extend probate and cause additional legal costs, along with the grief, that would be no savings we have enough money in a joint account to pay.

TIA
 


passingby

Member
not a lawyer

I'm thinking perhaps the reason the paralegal suggested you stop paying the medical bills until the estate went to probate is to avoid paying creditors out of order and thus causing problems for the estate.

There is an order in which debts of the deceased have to be paid and if you follow that order, when the estate runs out of money to pay before all the debts are paid then the rest of the creditors go bye bye. However, if you pay out of order you can be legally held to pay those that were on a higher priority than -for example the medical bills-even if the estate runs out of money.

The best thing to do is wait until you begin probate to pay anything. But don't delay too long in filing probate because there is a time limit for heirs and such to file, after which anyone with an interest in the estate can file and if they do they will use attorneys etc who will get a cut of the estate, thus limiting inheritance.
 

BlondiePB

Senior Member
yZenhymer said:
CA

Q: What advantage or disadvantate would NOT paying Hospice or HMO bills and waiting for these creditors to file a claim against the estate?

Our Attny's paralegal suggested that we stop paying any of my mother-in-law's (MIL) medical bills, which are nearly $8K. At least not until my wife is declared Executor of the Estate.

I wouldn't want to do anything that would extend probate and cause additional legal costs, along with the grief, that would be no savings we have enough money in a joint account to pay.

TIA
You do NOT want to be a creditor to the estate and in line for the succession of creditors to be paid. Therefore, do not pay the bills with your money. When probate is opened (the sooner the better), the executor will be issued Letters of Testamentary/Administration and an estate account can be opened to pay the bills.

Why wasn't Hopsice bills paid 100% by Medicare Part A? Hospice is 100% covered under Medicare Part A except for room and board at nursing homes and assisted living facilities.
 

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