Is medical debt a priority during probate?

| Feb 25, 2020 | Estate Administration |

When a person dies, the surviving family often has a lot to handle in order to close the remaining estate. Often, the majority of tasks associated with probate fall to the executor of a Texas estate. Though many bills may need paying after a loved one’s passing, some parties may wonder specifically about medical bills.

It is not unusual for individuals to pass with outstanding medical bills, especially if a person was in the hospital or otherwise ill before his or her passing. If the individual left behind a solvent estate, the executor will use estate funds to cover the remaining medical bills and other outstanding balances. Even with a solvent estate, it may be necessary for the executor to liquidate some assets in order to cover claims made by creditors.

On the other hand, a person could leave behind an insolvent estate, meaning that there are not enough assets to cover all of the person’s remaining debts. In this situation, the executor would pay the creditor claims in order of priority. Medical bills can fall at different levels of priority depending on state law, and the time at which the debt was acquired could also play a part. For example, if the medical bills occurred within 60 days of the person’s passing, they may have a higher priority than older debts.

The issue of outstanding medical bills and other debts of an estate can be difficult for many Texas residents to understand. Some people may think that the debt will pass on to surviving family members, but fortunately, that is typically not the case. The executor will need to properly handle creditor claims during the probate process, and individuals in this position could obtain help from knowledgeable attorneys.