Generally, if one spouse passes away, the other spouse is not personally liable for their debts. If the deceased spouse’s creditors want to recover, they must make claims against the estate. If there is enough money in the estate, they will be able to recover the full debt. If there is not enough money in the estate, they eat the difference.
How are Medical Bills Different?
In a grave departure from logic, North Carolina has a turned a once reasonable legal doctrine into a financial trap for families. The Doctrine of Necessaries originated as a legal policy that sought to ensure that the husband cover at least the basic needs of the wife. This came about in an era where women did not have a large presence in the workforce, and they were financially dependent upon their husbands. Thus, wives were able to contractually bind their husband by incurring expenses they could not afford themselves.
The effect of this doctrine was that it essentially ensured that the wife could obtain food, clothing, shelter, and medicine (necessaries) and the provider of these necessaries would be paid, even though the wife could not do so herself. This doctrine made sense in a time where one spouse was the bread winner and the other spouse was the home maker. However, this doctrine is not only alive and well in this day and age, it’s also extends beyond the grave.
Under the Doctrine of Necessaries, the spouse is personally on the hook to pay medical bills and funeral expenses. This means that, even if there is no money in the estate to satisfy the claims of creditor, the spouse will still be personally liable to pay the medical bills and funeral expenses of the deceased spouse.
While the funeral expenses part makes some sense, it is patently unjust to allow medical bills to attach to the spouse in the same manner. This allows medical service providers to essentially leverage the love between the spouses to make as much money as possible. What person would deny their spouse the best level of care, just because they may have to pay more money in the future? The medical industry has special interest groups to ensure that they get compensated for their grossly overpriced services. Unfortunately, North Carolina has fallen prey to these special interests.
How do You Avoid This?
One way around this doctrine is if the spouses were legally separated at the time the medical debt was incurred (when the services were provided)and the medical service provider had actual knowledge of the separation during that time. This is not the best way for happy couples to avoid personal liability for the other’s medical debt, for obvious reasons.
The best way to avoid this headache is some careful pre-planning. If you or your spouse have racked up or will rack up a large amount of medical debt, it may be in your best interest to do some planning with trusts. With the help of an attorney, it is possible to create an irrevocable trust to avoid these creditors from being able to reach your hard-earned assets.
If you have questions about how to avoid paying for your spouse’s medical debt, contact an Estate Planning and Elder Law attorney.
Brenton S. Begley
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”
PO Box 165
Shelby, NC 28151-0165