How to deal with debts of a deceased?

My mother, who was widowed, passed away. She had no assets other than a $5000 annuity and a $2500 life insurance policy, both of which have legal beneficiaries. She also had a little over a $100 in her checking account. We received a hospital bill for $3300, with more possibly coming. Are the beneficiaries responsible for paying her hospital bills out of her annuity and life insurance policy?

Asked on September 26, 2010 under Bankruptcy Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If her estate is the benficiary off any of the benefits (e.g. the life insurance  pays into her estate), then creditors could look to the estate to pay any bills. That means also that her bills may generally impact how much is available to inherit. However, a creditor cannot go against another individual to pay the debts of a deceased, unless and only to the extent that other individual had in some way co-signed or guaranteed the debts. That also means that if life insurance or similar benefits go directly to other individuals, the creditors cannot go after those benefits. So the big issue will be whether benefits are  going to the estate  (creditors can look to them) or to individuals (creditors should not be able  to.)

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