Billing After Death
A favorite on-line elder law resource of mine, Elder Law Answers, www.elderlawanswers.com, at one point reported on the difficulty experienced by family members when they try to inform a deceased relative’s creditors that accounts are no longer valid. The exchanges between the family and customer service representatives are almost humorous and highlight the fact that no one instructs average people what to do about bills when their family members die or tells creditors how to handle it. The article in question was titled “Dunning the Deceased: Institutions Can Be in Denial About Death.”
Here is ELA’s report of a discussion between a deceased woman’s great-nephew and a bank. The report originated with a Bloomfield, Michigan elder law attorney, Patricia Kefalas Dudek.
Nephew: “I am calling to tell you <my great-aunt> died in January.”
Bank. “The account was never closed and the late fees and charges still apply.”
Nephew. “Maybe you should turn it over to collections.”
Bank. “Since it is two months past-due, it already has been.”
Nephew: “So, what will they do when they find out she is dead?”
Bank: “Either report her account to the frauds division or report her to the credit bureau, maybe both!”
Nephew: “Do you think God will be mad at her?”
Bank: “Excuse me?”
Nephew: “Did you just get what I was telling you – the part about her being dead?”
Bank: “Sir, you’ll have to speak to my supervisor.”
<Supervisor gets on the phone.>
Nephew: “I’m calling to tell you she died in January.”
Supervisor: “The account was never closed and the late fees and charges still apply.”
Nephew: “You mean you want to collect from her estate?”
Supervisor: “<stammer> Are you her lawyer?”
Nephew: “No, I’m her great-nephew.”
Supervisor: “Could you fax us a certificate of death?”
Nephew: “Sure.” <Fax number is given and discussion resumes after bank receives the Fax>
Supervisor: “Our system just isn’t set up for death. I don’t know what more I can do to help.”
Nephew: “Well, if you figure it out, great! If not, you could just keep billing her. I don’t think she will care.”
Supervisor: “Well, the late fees and charges do still apply.”
Nephew: “Would you like her new billing address?”
Supervisor: “That might help.”
Nephew: “Odessa Memorial Cemetery, Highway 129, Plot Number 69.”
Supervisor: “Sir, that’s a cemetery!”
Nephew: “What do you do with dead people on your planet?”
When readers are confronting creditors of their deceased family members, here are some things they should know.
First. Decide whether there is an estate and, if there is one, who is responsible. If Great Aunt Millie died leaving nothing in her name, there may be nothing remaining to pay her credit card bills. Also, her great nephew typically would not be responsible for her debts.
Second. If assets still remain that are in the decedent’s name after death, it may be necessary to file for an estate administration. The person who is appointed executor goes to the Courthouse in the County where his deceased relative was living at the time of her death and files <probates> the Will or, if there was no Will, then an interested party files to become administrator of the estate. An estate account may then be established from which bills are paid.
An agent under a Power of Attorney does not have authority to continue to pay bills after death. This should be done by the Executor.
Third. Be aware of rules regarding insolvent estates. Aunt Millie may have died with assets in her name that pass by Will but still might have debts that are greater than her assets. The State provides for this by listing the order in which debts must be paid if there is not enough to pay everyone. Fortunately, payment for the Executor of the estate and the attorney for the estate is high on the list since otherwise such estates might never be resolved. Still, there are times when it may not be worth the time and the effort to wrap some small estates.
Fourth. Where Medicaid is involved, consider any government claim under estate recovery. If Aunt Millie died in a nursing home and her care was covered by Medicaid, the government can make a claim after death. Do not immediately cash a final check received from her patient’s account or settle her account until you know that estate recovery has been satisfied.
When in doubt about these matters, consult an attorney who practices in the area involved.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.