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- Thread starter Nittany Ned2
- Start date
is there any money in the estate account? if not let them come and tell them too late.
Somewhat strange, but not unusual. Not the easiest thing to do to check if they are legitimate.If your mother-in-law was covered by Medicare or some other insurance, the expenses should have been submitted and there should be EOBs (which you should be able to get from the provider or insurer). That's not foolproof, but it's probably your best bet.
Sadly it can happen.
What do you mean by "fradulent filings"? I assume somebody in your family was familiar with the medical treatment your mother in law was receiving. They should be able to review the charges. I would have thought the bills would be submitted to Medicare anyway. Are they now asking for a deductible?
Have the assets of her estate been distributed? If so tell the provider it's too late. If not, the executor is responsible to pay legitimate claims.
If the Executor has complied with certain requirements for distribution of the estate, he/she will not face personal liability for any claims made against the estate subsequent to distribution. Those requirements are:
- That the estate assets are distributed at least 6 months after the deceased’s date of death;
- That the executor has published a 30 day notice of his/her intent to distribute the estate; and
- That the time specified in the notice has expired.
Is there a pending probate administration of your MIL's estate? I'm assuming there is, because you referred to your wife and BIL as "Executors." They would have no legal status at all unless a probate was opened and they were appointed as Executors. Naming them in the Will is just nominating them. The probate court judge makes the actual appointment.
If there is a pending probate, that probate very likely involved publishing (usually in a local newspaper) a "Notice of Administration of Estate" that gives "constructive notice" (i.e., notice to any and all concerned) that your MIL died, and that creditors have a specified period of time in which to file claims with the Executor, or they will be cut off and no longer valid under state law. That is how it works in most states, anyway. If a creditor files a claim, the probate court judge may well be the party deciding whether the claim should be paid.
If there was no probate (as would likely be the case if your MIL had a properly funded living trust in place when she died),, then your wife and BIL may well be "Trustees," but they are not "Executors." There may well be no statutory procedure in your MIL's state for officially cutting off creditors' claims if there is no probate. (You should ask a local attorney about that.) .If there is not, you have to look to the relevant statutes of limitation in your state. I don't know where your MIL lived, but most states have a variety of different statutes of limitation, which each specify their own "limitations period" during which a person may sue for the particular form of legal claim it covers. In California, the limitations period for contract claims is three years. There is also a separate statute of limitations for legal actions against decedents, and it is just one year. Perhaps your MIL's state of residence has similar statutes of limitation.
No trust needed if all assets can be passed by title, transfer on death, or beneficiary designation.
Are the bills “first notices” or are they later such as 2nd or 3rd notices? The original claims were probably sent to Medicare, but how long after the services were rendered? Perhaps Medicare asked for additional information or documentation to support whether the claim got paid or not. This can sometimes take awhile. Also, if there was supplemental insurance involved, this may have delayed the provider getting reimbursed, possibly for the same reasons regarding documentation, etc. as with Medicare. After submitting the claims and payment being denied for various reasons after going through the process of resubmissions for additional documentation, etc., it may eventually found that the patient is liable for a certain portion of the bill. All of this can take time, months or longer, and why the long delay in getting the bill. A long delay is not necessarily fraud, but although this time frame is not usual, it could potentially happen.
Still, first notices can take awhile for some of the reasons given above. If you can find the Explanation Of Benefits regarding these instances of care and match them up to the bills, it would be helpful.
For the benefit of others. A trust can be costly. Simple estates can bypass the need for probate or even hiring an attorney by using titles and beneficiary designations.I'm aware of that, bd.
Putting assets in joint tenancy and utilizing beneficiary designations can indeed assist in avoiding probate. But although avoiding probate is generally desirable, is not the only consideration. Your joint tenant or tenants is/are the only permissible beneficiary(ies) upon your death. So merely putting stuff in joint tenancy often does not work. It can also screw up the opportunity for a valuable step up in basis.
Property that is transferred by transfer on death deed occurs at the donor’s death. The beneficiary would get a step-up in basis just as if it had passed through probate.
FYI, I was the executor for my FIL's estate so I've been there and done that.
Did she have Medicare Part C? If so, then check with the private carrier's explanation of benefits for each service rendered. It will tell you what they covered and how much was her responsibility. For non-medical bills, I waited until I received the 3rd notice before paying. Once the probate becomes public record the creditors seem to come crawling out of the woodwork. I had to do battle with a few. So be vigilant. Good luck.
Assume Dad has a home that is worth $400,000 and he has a $100,000 basis in it, having owned it for a long time and watched it appreciate. Assume that Dad signs a joint tenancy deed putting title in his and his son's names as joint tenants, each as to a one half interest. Dad has just made a gift to son of $200,000, and son gets a $50,000 basis in that one half interest. (It's called a "carryover" basis, meaning that son gets the same basis in that one half interest that Dad had in it prior to the transfer. (That's because no step up in basis is allowed for property transferred via gift, as opposed to bequest.) Dad retains a one half interest also worth $200,000, and basis of $50,000 in his retained one half interest.
Assume Dad dies a few years later, when the house is worth $500,000. The son now receives Dad's one half interest by operation of law (i.e., automatically, and without probate). All he has to do to correct the official land record is to sign and record an "Affidavit of Death of Joint Tenant." Son now owns a 100% interest in the home, which is now worth $500,000. He gets a step up in basis, but ONLY with respect to the one half interest he has inherited from Dad. The stepped up basis is equal to the fair value of the inherited interest as of Dad's date of death. So he gets a stepped up basis of $250,000 in the one half interest he inherits from his dad, and he retains a $50,000 basis in the one half interest he already owned. So he has a total basis of $300,000 in the home, meaning he would have roughly $200,000 in capital gain if he sold it for $500,000.
Had he not received a joint tenancy interest but instead inherited the entire 100% interest in the home upon Dad's death, son would have gotten a stepped up basis in the entire 100% interest. In other words, a $500,000 basis, meaning he would have zero capital gain instead of $200,000. That is meaningful. That can be accomplished without probate, via a living trust.
If this is PA, just because the assets avoid probate does not mean you do not have to pay inheritance taxes. You have 9 months from the date of death to file the return and pay the taxes. Just FYI
Agree. I understand the benefits of a living trust. But trusts aren't without cost and shouldn't be considered the default solution to estate planning. For example, not everybody has a $400,000 unrealized gain on their primary residence. Many that do have such gains sell their homes (tax free) before passing.
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