Estate Laws on Parents' Medical Bills in Illinois

By John Cromwell

When your parents die, they may leave behind unpaid medical bills. In Illinois, the deceased parent’s estate is generally responsible for paying off those liabilities. The parent’s probate estate is composed of the assets she solely owned at the end of her life, such as real estate titled in her name or personal financial accounts. However, there are circumstances under Illinois law where people, and not just the estate, have a financial responsibility to pay the outstanding medical liabilities.

When your parents die, they may leave behind unpaid medical bills. In Illinois, the deceased parent’s estate is generally responsible for paying off those liabilities. The parent’s probate estate is composed of the assets she solely owned at the end of her life, such as real estate titled in her name or personal financial accounts. However, there are circumstances under Illinois law where people, and not just the estate, have a financial responsibility to pay the outstanding medical liabilities.

Priority of Probate Claims

Some estates’ assets are insufficient to cover the decedent’s debts. In that case, Illinois has a system that groups the debts into certain classes. The debts are then paid off by group. Only when a group of debts are entirely paid off can an estate pay the next group of debts. In Illinois, medical expenses are the last debts to be paid for by the estate. Funeral expenses, back taxes and fees, funds due to employees, and awards to your parent’s surviving spouse and to her children are all paid by the estate prior to it settling medical expenses.

Protect your loved ones. Start My Estate Plan

Responsibilities of Spouse

If your deceased parent’s spouse survives, he is personally responsible for the deceased’s medical debts. Under the Family Expense Act, spouses are both responsible for the family expenses that either one incurs. What constitutes a “family expense” has been debated in Illinois courts. However, it is widely agreed that medical expenses of either spouse constitutes a family expense and therefore both spouses are liable.

Responsibilities of Children

While the Illinois Family Expense Act makes spouses liable for each other’s medical expenses, it does not make children liable for their parent’s medical expenses. Children may generally be liable for their parent’s medical expenses only if they promised to pay the debt as a co-signer. To qualify as a co-signer, the child must sign the relevant medical billing forms as well as an “Explanation of Guarantor’s Obligation.”

Trust Property

As part of their estate planning, many parents place property in a trust as a means to ensure that their assets are quickly distributed to their children when they pass on. In Illinois, trust assets are excluded from the decedent’s probate estate. When the decedent dies, all assets in the trust she created are protected from the decedent’s creditors, including a hospital or doctor. They cannot sue to obtain the trust assets to settle what is owed.

Fraudulent Transfers

If your parent gave you valuable property shortly before her death, and her estate cannot pay its medical debts, the doctor or hospital may sue. These creditors can claim that the transfer was fraudulent. If the parent made the transfer with the intent to defraud her creditors or with the knowledge that she lacked the resources to pay off her debts, under Illinois law a court could invalidate the transfer with the property going back to the parent’s estate. That property would then be used to pay off any remaining debts. As a result, creditors may scrutinize property transfers to children that happened immediately prior to the parent’s death.

Protect your loved ones. Start My Estate Plan
Who Inherits When Someone Dies?

References

Resources

Related articles

Failure to Pay Living Trust Debt

A living trust is created while the person who created the trust was alive. The trust allows the trust creator to hold property for the benefit of one or more people. Upon the death of the trust creator, the property held in trust is distributed to those people specified in the trust document, who are called beneficiaries. Before the trust property is distributed, however, any remaining debts the trust creator had must be paid. Failing to pay these debts can result in serious consequences.

Things to Do When Someone Dies With a Revocable Trust in Florida

Revocable trusts are a useful tool for avoiding probate in Florida. The process involves transferring property owned during life to the trust with directions on how the assets are to be distributed after death. The individual who establishes the trust is referred to as the settlor, and the person who administers the property is referred to as the trustee. Those who stand to benefit under the trust terms are known as beneficiaries. Upon the death of the settlor, it is the trustee's job to perform certain duties associated with administering the trust in accordance with Florida law.

Can You Be Forced to Sell a House You Inherited to Pay Off the Medical Bills of the Deceased?

Even in death, people are responsible for their own debts -- at least to the extent that they leave enough money behind to pay them. The law doesn’t hold beneficiaries and loved ones responsible for paying bills the decedent incurred before he died, including medical bills. However, this doesn’t always mean that his bills won’t have an effect on your inheritance if you’re a beneficiary.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Does Beneficiary Have to Pay Funeral Costs?

When a person dies, his body must be disposed of according to state law. Generally, states require that the remains of ...

How Can the Executor of an Estate of a Life Tenant Allocate the Appreciation to the Beneficiaries?

Life estates are often used in estate planning to help expedite the transfer of property between a decedent and his ...

Can You File Bankruptcy on Funeral Expenses?

The average cost of a funeral is more than $6,500, according to industry analysts. This figure includes only funeral ...

Death Without Wills & the Rights of Survivorship for a Property

While a will is one tool used in estate planning, there are other options available to ensure that your property goes ...

Browse by category
Ready to Begin? GET STARTED