How your agency can collect from an estate

Estate Claims 101

If your agency must collect from a patient’s estate, the following rules should prove helpful. Estates are almost exclusively governed by state law and also vary procedurally by jurisdiction, says Elizabeth E. Hogue, a health care attorney specializing in home care in Burtonsville, MD. However, these general procedures apply in most areas:

1 When a person dies and they own any real property, whether or not they have a will, someone must open an estate for them.

If the decedent names an executor in his or her will, then that individual must go to the appropriate court official in the jurisdiction where the deceased resided and open the estate. If there is no will, the law usually lists potential executors in priority order, such as spouse, child, or sibling.

2 Once an estate is opened, the executor must report on the estate’s assets within a specified period of time.

The estate becomes a matter of public record at the time the report is filed. After an estate becomes public, creditors must file a claim against the estate within a specified period of time, which varies by state. They file a claim by completing court-required paperwork and providing supporting documentation to the court clerk.

3 Claims against the estate must be settled before inheritances or other bequests are carried out.

If there are enough assets in the estate, all creditors will be fully paid. If there are not enough assets to pay all outstanding claims, then creditors are usually paid in priority order, established by state law. Executors are bound by these requirements. Health care providers usually have high priority, so it is worth your time to file even if the estate has minimal funds.

4 Most states require that estates remain open at least six months, during which time the executor must file periodic reports on the estate’s activity.

Creditors can track these reports to ascertain claims paid and obtain an ongoing assessment of the estate’s assets. Normally, jurisdictions do not publish estate information; providers access updates by reviewing files maintained in the court clerk’s office. If assets must be liquidated to pay claims, or there are legal challenges to the decedent’s will, the estate can remain open for many years.