My father died a few weeks ago with assests worth less than 10k and no will. He had 2 life insurance policies, and several health/disability policies. I paid for his funeral and I am administrator of his estate. I am getting many checks to his estate for the disability payments, odd payroll checks and health insurance checks for his medical bills, which all goes into the estate account.
But how do I get reinbursed for the funeral and admin costs? I know technically funeral costs get reimbursed from the estate, but that means that i would be taking money from the health insurance companies thats meant to pay for the doctors bills to cover my funeral costs. is that legal?
Elder Law Attorney
Q: But how do I get reinbursed for the funeral and admin costs?
A: You loaned money to the estate and now the estate owes you money which you, as Administrator pay back to you as Creditor.
Q: I know technically funeral costs get reimbursed from the estate, but that means that i would be taking money from the health insurance companies thats meant to pay for the doctors bills to cover my funeral costs. is that legal?
A: The payments of the medical insurance companies are in satisfaction of their obligation to your father, under his insurance/benefit policies. Once the $$ hits the probate estate, the probate rules of priority take over and determine who gets paid. Generally, the highest priority goes to the folks who are helping administer the estate (that's you and your probate attorney), next come the funeral expenses, and then come the medical expenses. If the check is payable to your dad, the source is not relevant.
Estate Planning Attorney
You need to hire an attorney to assist you in opening the estate. My guess would be that the disability and payroll payments are going to have to be returned to the payor. You should notify the payors and creditors of the death. The medical bills are a debt of the estate only. The funeral bills are also a debt of the estate only and funeral payments have priority over all others and need to be paid in full. If the life insurance is payable to the estate it is estate money but if it is payable to an individual person(s) those individuals are entitled to keep those funds. You need advice on which amounts you can keep/return and which bills do or do not need to be paid. No you cannot take money that is meant specifically for one source and divert it to another.
This is not legal advice nor intended to create an attorney-client relationship.
Lawsuit / Dispute Attorney
If you paid for the funeral costs, it would be paid out of the assets of the estate or out of life insurance, generally before most of the other expenses are paid. Health insurance checks meant for the doctors should not be used for the funeral expenses. They were issued for a specific purpose, and you could be personally liable for misapplying those funds. If your father was receiving disability checks (federal or private) and he passed before a check was issued, that check is supposed to be returned.
Estate Planning Attorney
I am a NY lawyer. The funeral is a priority claim, so you should be fine with the reimbursement. The one theought I had is whether amongst these policies, one is or was for the funeral. Also, maybe he had a pension covering this type of expense? I agree with the prior answer.