When one’s spouse is ill, we do everything we can to give them the care and attention they need. You try not to think about the bills, but it is inevitable as they can be very expensive. If left unattended, such things will likely build up.
When a spouse dies and you are left to pick up the pieces one major question would be if you are responsible for their medical bills? What does the great state of California have to say?
In most cases in California, a spouse is responsible for all the bills, including medical, of their late partner. California is one of the few states that’s a “community property” state and so most debt accumulated by a married person is a “marital obligation” with liability for both people.
Now, this may be a shock for some as they thought that they would not have to pay the bill since they did not sign any paperwork or agree to any of the charges.
Sadly, the courts tend not to side with you even if you didn’t know and this happens often. Read more below about communal property states and how you can afford to pay for these bills.
Disclaimer: I’m writing this to give you some basic information, please always seek out your own independent financial and legal advice before acting on anything mentioned below.
What is a community property state?
There are nine states that fall into this category; Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. They all have similar laws pertaining to assets and liabilities acquired during the marriage, and they considered these as “community property” and part of your marital obligations.
Assets are defined as money, or property that one owns, and liabilities are what you owe someone or a company/institution. So, this goes both ways, if your spouse had assets you would be entitled to all of them, but int the same way you can inherit all of their debts. Medical bills fall into this category.
What is considered “marital obligations”?
A marital obligation is the fiduciary duty owed to a spouse if both are living or one as passed away. In California, this is defined as a relationship arising out of a civil contract between two persons. There must be consent in making that contract, but consent alone does not constitute marriage. You need a physical document.
California is not a common-law state, where a couple could be married with no license or wedding. This is achieved when they have just lived together or been together for a long period of time. This marriage is known as a common-law marriage and not legally recognized in California.
Martial obligations and the laws of community property can be overruled and stopped though. You would need to have a pre-nuptial agreement sign before the wedding. A pre-nuptial agreement states who gets the deceased’s money or belongings. It also can state if the spouse is liable for their medical bills and debts.
If it is stated in the pre-nuptial the spouse could be exempt from the medical bills, but not in all cases. The ones that are trying to collect on the medical bill will most likely go after the deceased assets first so while the spouse may not be liable they may not get all the money they thought they would from the deceased assets.
Who is responsible for medical bills in California after death?
While it may seem cut and dry that you owe the payments on the medicals bills in California, since it is a community state, this is not always the case. The laws are always changing and it is not always clear as all contracts and documents have things worded in different ways.
This wording can be up to interpretation and different judges/ courts will look at it differently and take it case by case, hopefully ruling in your favor. But do not assume that they always will and it is best to get someone versed in the reading of these documents before it ever even goes to court.
If you live in California (or any of these other states such as Wisconsin – see my other article) and your spouse has died the first thing you should do is to speak with an attorney. You want to be absolutely sure that you know and understand your rights and responsibilities. This pertains to all the bills and not just the medical ones.
If you don’t have an attorney, you can contact one by going to this website.
What happens if you forget to pay?
There usually is no leeway if you forget to pay the bill, just because someone died the hospital will not let the spouse off the hook. Though, the hospital will first usually contact the spouse or the next of kin a few times.
After they have not been able to contact you, they usually sell your debt to a credit collection agency for pennies on the dollar. From there the agency will try to collect from you in by any means.
Credit collection agencies are known to be unscrupulous and sometimes may break the law when trying to collect from you even if you don’t know it. Make sure that you know your rights and what is legal and illegal.
Both hospitals and creditors will usually take some sort of payment plan and/or you can settle on an amount that is less than the original amount. They are just happy to get some money as they know not everyone is able to pay the high costs of the medical bills.
Another side effect of this is that your credit score will be downgraded, it may only be small at first but as long as you have debt your score will go down.
This could not only hurt you in the short term but the long term effects can hurt your chances of getting loans, and applying for anything, even a job. Your credit score in America is now linked to almost everything in your life, so be wary.
I recently looked into getting a loan and I’ve actually had a good experience with Supermoney.com. For me, it was a car loan but I spoke to them about a dedicated funeral expenses loan, which is one of the services they offer and was quite impressed. To see if you could qualify, check out my link here.
Does a Funeral Plan cover medical bills?
In most cases, it does not. For you to have it cover these medical bills and similar bills, like the end of life care, you have to have that set up from the start.So you will have to plan for it and pay more for the plan, also you’ll find a place that has this type of plan.
Another reason that most of the time the plans do not cover these types of things is that funeral homes and businesses want the money to be spent on the funeral itself and not on the things surrounding or proceeding the funeral. They will make more money this way when you use all the money on the funeral and products related to it.
What if you don’t have any money?
Since you have to pay for the doctor and the medical bills and may not have the funds, talk to the health provider and see what you have signed off on specifically. Most of the time when your spouse entered the hospital you were the one signing the forms which usually, unfortunately, means you take all responsibility for the bills, no matter what.
But, when there’s no money or you have very little income, health providers might write off the account in the best-case scenario. This does not happen often but it can so make sure you ask and plead your case with the one that is trying to collect on the bill.
The second scenario would be that they give you time and/or lower the amount that you owe. In the worst-case scenario, it goes to court or the creditors which you do not want. Try to avoid this one at all costs.
After hospitals or doctors’ offices try to collect on their own for some time, the hospitals and doctors’ offices will probably sell their debt to debt buyers. Creditors will try to collect from anyone that is near the deceased.
Even if you are not the estate representative, spouse, or co-signor of the medical debt these people may still contact you to collect the debt. Outstanding medical bills are big money and America has the highest fees for medical procedures in the world.
With this type of money, they want to see if they can collect any of it. If you are the spouse it may be a good idea to tell all of those related to you that people may be asking for money and they are not to pay them as it is not illegal to ask and in fact, it is illegal to harass you like that. There is a fine line, one which these people like to cross.
If you are also in a situation where you can’t find enough money for a proper funeral for your deceased loved one, there are charities and other systems that could help you; I’ve written a list of 11 of them in this article here.
Get legal help
If you feel that you are being unfairly harassed, California has a fair debt collection practices act that protects people from these types of practices. Remember that if you are not the spouse, co-signor, estate representative you are not responsible for the debt and no one should not be contacting you about the deceased’s medical bills.
This may seem harmless but if it’s not taken care of, they will keep harassing you and others, possibly tricking someone into paying by false claims or pressure. Read about what is legal and not in California about debt collection on the official site here
How long do you have to settle unpaid medical bills after death?
This is up to the hospital and their billing department. It is usually around 30 to 90 days from the death of your spouse. This may sound morose, but remember some money is better than no money to them, and hospitals are businesses that need money to keep going.
In almost all cases they will settle for less money and/or let you pay in installments. This is better than going to court and in the worse case having to go to a collections agency.
What if you were separated or divorced, are you still responsible?
This could be tricky and there is no definite answer to the question as everyone’s case is different. But in general, if you were separated and not legally divorced they could come to you with the bills and you may still have to pay.
This is not likely and if they try to make you pay, by bringing it to court you probably would win. This could be a costly endeavor as well and maybe more than the medical bills.
If you have been legally divorced they will not be able to come after you for the bills. This is unless you have signed any of the forms or the medical bills were accumulated while you two were legally married.
Do children or relatives have the responsibility to pay for medical bills?
No, children or other relatives are not responsible for the bills unless they signed any paperwork saying that they would pay. But remember that creditors are entitled to payment from someone and this could be from the money and property (the “estate”) that your loved one left behind.
They will first go after the estate for the funds and if there is no money left after this they can’t legally come after anyone other than a co-signor or spouse, but they may try.
This may seem far-fetched but sometimes these people (creditors) will call or even visit the homes of the surviving family members or even their family’s, as long as they don’t misrepresent themselves and state that you must pay the bills, they will try anything.
If you received the life insurance benefits from the death of the deceased, you are still not liable. The proceeds of the life insurance policy were never actually owned or held by the deceased, so it was never theirs. The money and/ or benefits are yours but might be taxed at a higher than normal rate, getting help from a tax professional is the best idea here.
If you are learning the lessons of not having life insurance and leaving your loved ones with enough money to cover your final expenses, then see my recommended life insurance brokers for the cover you REALLY need.
What if there is no will, who has to pay for medical bills then?
It is a sad fact of life that in America almost everyone dies owing at least some debt. It may only be last month’s bills of it could be the final medical expenses. But if there is no debt and now will this could be shocking for the deceased family.
As stated, in California the spouse will most likely be responsible with or without that will. But having a will can greatly take off the stress of paying these bills as a well-written will should include where and how these things should be paid for.
If you don’t have a will you should look into getting one as they protect you and your spouse’s assets and money. You can learn more about getting a will with US Legal Wills here.
Do nursing homes, hospices, prescriptions, etc. count as medical expenses?
These are tricky as nursing homes do count as medical expenses, and long-term care facilities like hospices outside of a hospital or nursing homes are sometimes also included.
It depends on how they are classified and what type of coverage they use. For the most part, these are not classified as medical bills but in a community property state, you will have to pay these fees as well.
Though in California under the filial responsibility statutes the laws say adults children are also responsible for financially helping parents who cannot or unable to afford care on their own. While these laws are from a long time ago to stop the elderly from going into poverty, they are on the books and still can be, but rarely enforced.
This is similar for prescription drug bills. They are the responsibility of health insurance and/ or the estate. If neither of these have enough funds in them then, the matter will not go any further. The spouse and family are fortunately not responsible for these expenses.
What steps can I take to pay for the medical bill?
Whether you can afford to pay the medical bills or not, there are two main steps to take to figure things out.
- The first is to call the insurance company or companies. If you, your spouse, or your spouse’s work, their insurance company is your first line of defense when paying for the bills. These companies are the first to handle medical bills. By making contact with the insurance company and explain the situation to the insurance provider can get things moving. They will have more power and the ability to negotiate with the healthcare facility to get a lower rate for you or they will cover a higher percentage of the cost. The insurance companies have rules and guidelines that they will follow.
- If you do not have insurance or the insurance companies didn’t, you should in all cases try to negotiate with the hospital or bill collectors. Just about all healthcare bills are negotiable. By keeping a cool head and talking to the healthcare provider or whoever is trying to collect from you most likely will work out in your favor. You don’t want to get curt with them as they hold the key to a lower bill but be stern and make sure you have done your homework before you call them. Have a plan and stick to it.
If you are reading this and thinking, wow maybe I should get some cover, then feel free to learn about my recommended life insurance brokers here.
Who pays the credit card bills?
This is where your signature matters. If you have signed a joint application for the credit card, you will owe the balance, even if you didn’t know how high it was or agree with what was bought.
On some credit cards, people can be an authorized user. They have the card and can use it, but never signed as a co-signor. In this case, most states will don’t require you to pay. But don’t keep using the card after they died, you will be responsible for the debt then.
If you now need a new card, I can really recommend Principal Platinum as they gave me a really good deal on my new card.