Can a Person Who Died Pay for Their Own Hospice and Funeral Expenses?

In a sense, yes

 When a person passes away, they almost always have outstanding bills from the hospital, hospice, and/or funeral home.

These bills can be costly. Experts estimate that funerals can cost up to $12,000, while hospital expenses in the last days of life can run tens of thousands more (thankfully, this is often mostly covered by insurance or Medicare).

My Florida probate clients, typically the spouse or grown child of the person who died, frequently ask if they are the ones responsible for paying these bills. They wonder whether the deceased person themselves can cover this end-of-life cost.

The answer is, they can.

A Probate Estate Is a Legal Entity

When someone dies in Florida, a legal process typically takes place, known as probate. This is the process where the court oversees the distribution of the person’s assets to their rightful heirs.

During the course of certain probates, it is common for the heirs to “open an estate.” What that means is a legal entity is created, known as “The Estate of X,” X is the name of the person who passed away. While the probate is ongoing, that entity remains in force.

The person in charge of the estate, and this legal entity, is the personal representative. This is typically the person named to this post in the will, often a spouse, sibling, or grown child. (Learn more about the role of the personal representative here.)

The personal representative is able to open a bank checking account in the name of the estate. Assets the person had at the time of his or her death, such as the funds from bank accounts or stock portfolios, go into this estate bank account.

Estates Are Allowed to Pay Bills

If the deceased person owed debts while they were alive that hasn’t been paid, the companies and individuals where the money is owed can file what is called a “creditor’s claim” against the estate. Proceeds from the estate are best not distributed to the heirs until this claim period is over.

There is a proper legal process that that owed money must go through. The law ranks creditors in a certain order, so, for example, the Internal Revenue Service gets paid before a credit card company.

Hospital and hospice bills are paid by making creditor’s claims. These institutions file their claims, and if the fees are deemed valid the personal representative pays what is owed from the estate account.

Funeral Expenses Go to the Top of the List

Funeral expenses are treated as a special case by the law because those making the rules know that every deceased person needs some sort of funeral. For this reason, the personal representative of the estate can simply pay the funeral bill when it is presented from the funeral home. However, the law limits this amount to $6,000.

So unlike other claims, the funeral home does not have to wait for the period of the creditor’s claims to pass before it can be paid, the way other types of claims against the estate typically do.

In some cases, the deceased person doesn’t have many assets, but it’s more than enough to cover the costs of the funeral with a little leftover. In this instance, probate might be opened in order to pay the bill with the deceased person’s money, with the remainder distributed to the heirs. Because in this example the value of the estate is low, it would fall below the $75,000 amount set by law to allow it to be probated via what is called a summary administration, a faster and less expensive process than full-administration probate.

Of course, with funeral expenses being so high—and climbing every year—sometimes the cost of the funeral is more than the value of the estate. In this case, funeral parlors are often open to negotiating the cost of their bill, especially since they know the law places a limit on what the estate must pay of $6,000.

So, if a close relative passes away, know that you are not responsible for paying their funeral or hospice bills out of your own pocket. That money can come from the estate of the deceased person as soon as the probate process is started. Hopefully once that bill is paid there will be many assets left over for all the heirs to inherit a tidy sum.

Probate Attorney Coral Springs

Law Office of Gary M. Landau P.A.
7401 Wiles Road, Suite 204
Coral Springs, FL 33067
954-979-6566

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