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What Happens to Medical Bills When You Die in Georgia?

Posted by Joel Beck | Feb 03, 2025 | 0 Comments

Handling the complexity of debt and estate management can be intimidating, and dealing with the loss of a loved one is never simple. At Peach State Wills & Trusts, we've been helping Georgia families get through the process of estate planning and probate matters since 2007. We know that questions about debts and inheritance can feel overwhelming, so let's make sense of it all, step by step.

The Estate's Responsibility: Who Pays?

When someone dies, their debts—including medical bills—don't just disappear. These obligations are typically the responsibility of the deceased person's estate. But what does that mean?

An estate includes everything the deceased owned at the time of their passing: property, bank accounts, investments, personal belongings, and more. Before any inheritance is distributed to heirs, creditors have the right to make claims against the estate to recover what's owed. This is why it's crucial for the estate to settle debts first, ensuring everything is handled fairly and legally.

If you're serving as an executor (the person responsible for managing the estate), it'll be your job to handle these claims during the probate process.

The Probate Process: Sorting Through Claims

Probate is the legal process of settling a person's estate after they pass away. Creditors, including healthcare providers, can submit claims during probate to recover unpaid bills. As the executor, you'll need to review these claims carefully to ensure they're legitimate before arranging payment.

Keep in mind, that probate is about distributing what's left to the heirs, which is why managing these claims efficiently is so important.

Order of Payment: Who Gets Paid First?

Georgia law sets a specific order for how debts are paid from an estate. This ensures fairness and helps executors prioritize payments. Here's the order:

  1. Year's support award

  2. Funeral expenses

  3. Costs of administering the estate (e.g., legal fees, court costs)

  4. Reasonable medical expenses from the deceased's final illness

  5. Unpaid taxes or other debts due the state or federal government

  6. Judgments and Secured debts (e.g., mortgages) and other liens created during the Decedent's lifetime

  7. Unsecured debts and all other claims (e.g., credit cards, unpaid medical bills)

This hierarchy ensures that critical expenses, like funeral costs and final medical bills, are addressed before less urgent debts.

What Happens If the Estate Can't Cover Everything?

Unfortunately, not every estate has enough assets to pay off all its debts. This situation is known as estate insolvency. If there aren't enough funds, creditors might not get the full amount they're owed. In some cases, they may even agree to accept a reduced amount as a final settlement. It's worth exploring this option if the estate is short on funds.

The good news? Heirs won't be expected to cover unpaid debts with their own money unless they've taken specific actions (like co-signing on a loan or medical bill).

Are Family Members Personally Responsible?

This is a big concern for many families, and the answer is usually no. Family members aren't generally responsible for a loved one's medical bills unless:

●  They co-signed on the bills or loans.

●  They're the spouse of the deceased and the medical expenses are considered “necessary.”

●  They live in a community property state (Georgia is not one).

●  Medicaid Estate Recovery applies.

Speaking of Medicaid, it's important to understand how this program might affect the estate.

Medicaid Estate Recovery: What You Should Know

If the deceased was 55 or older and received Medicaid benefits, the state of Georgia may try to recover some of those costs from their estate. This process is called Medicaid Estate Recovery. However, there are exceptions—such as if the deceased leaves behind a spouse or a dependent child under certain conditions.

If you think Medicaid Estate Recovery might apply to your family, exploring your options early is a good idea.

Beware of Debt Collectors

Debt collectors often contact family members after someone passes away, but there are limits to what they can legally do. They can't mislead or harass you, and they certainly can't make you pay out of pocket unless you're legally obligated. Executors or administrators can receive calls about the deceased's debt but are not personally liable for those debts unless they mismanage estate assets. Always exercise caution when sharing information, and consider consulting with a legal professional before engaging with collectors.

Facing the “What Ifs”? Let Us Help.

Dealing with the loss of a loved one is never easy, and questions about unpaid medical bills only add to the stress. At Peach State Wills & Trusts, we're here to guide you through the estate planning and probate process, ensuring you and your family have the peace of mind you deserve.

If you'd like to learn more about protecting your loved ones—or if you need help managing an estate—give us a call at 678-344-5342 or visit our website to schedule a consultation. Together, we can ensure everything is handled properly so you can focus on what truly matters.

About the Author

Joel Beck

Joel Beck founded The Beck Law Firm, LLC in 2007. His firm focused on business law and estate planning needs of clients, two areas that he was drawn to based upon personal and business experiences in his life, including a ten-year career at NASD (now known as FINRA).

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At Peach State Wills and Trusts, a division of The Beck Law Firm, LLC, we're committed to answering your questions about wills, trusts, powers of attorney, healthcare directives, uncontested probate, and business planning issues in Georgia.

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