Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.
--
Pete Cresswell

On Thursday, May 14, 2015 at 12:12:38 PM UTC-4, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.
--
Pete Cresswell

I just happen to have Quicken Will Maker on my PC. Just took a
look and they have nothing specific to medical expenses. It just
directs the executor to pay all debts and expenses consistent with
NJ law. I agree with your assessment, I don't see any good reason
to give priority to medical debt over any other debt. I don't recall
seeing that in my previous wills either. It's probably
not even legal. If you only have $20K in net worth, why should it
all go to medical expenses, versus being shared among all legitimate
debts? I would think the other creditors could sue and win. There
is probably some state law that governs that executors have to
proceed fairly, equitably under that circumstance.

On 5/14/2015 11:12 AM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.


I have been both an executor and a trustee and I have never seen
anything that speaks specifically about paying medical expenses. What I
have seen is something like "to pay all debts and expenses required by
law". Of course, the norm may be entirely different in other parts of
the country.

On 5/14/2015 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.


Only thing I can think of is the potential for abuse if the person had
huge bills at the end and the family just figured "screw the doctor, dad
died anyway".

In reality, all bill should be settled but you are more likely to pay
off a $60 phone bill than a $50,000 hospital bill.

On 2015-05-14, IGot2P wrote:

I have been both an executor and a trustee and I have never seen
anything that speaks specifically about paying medical expenses.

My mother recently past and with no will I hadda get an attorney and
am currently going thru probate. I payed all of her outstanding
medical bills from her estate assets, as per my attorney's
instructions.

Perhaps you are being dinged for her debts cuz her estate has no
assets. You know those debtor dirtbags are gonna try and get their
money from someone. Ima geezer ona fixed income, so am far from well
off. Still, I consulted and hired an attorney. An attorney would be
able to tell you if the outstanding debtors have any claim or are they
jes trying to scam you.

nb

On Thu, 14 May 2015 12:12:33 -0400, "(PeteCresswell)"
wrote:

Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.


Just a template for a Will? Can be modified based on state laws.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.


May not have a lawn service or pool maintenance debt

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

Isn't the Will made to facilitate or limit Probate court in your state
....

On 14 May 2015 17:28:15 GMT, notbob wrote:

My mother recently past and with no will I hadda get an attorney and
am currently going thru probate. I payed all of her outstanding
medical bills from her estate assets, as per my attorney's
instructions.

My condolences to you. I'm still lucky. Spoke to Mom on Sunday, for
Mother's Day. At 93, she still has her class

She has all her affairs in order. Final arrangements have already been
paid, except scattering her ashes in her desired location at sea.

On 05/14/2015 11:12 AM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

A decent lawyer, maybe?

IANAL but both parents have deceased and served executor for both; plus
both of wife's are deceased and while didn't serve myself am quite
familiar with their cases. None have had such a specifying any specific
expense nor time frame; only the generic of "all legitimate claims and
expenses" or somesuch.

I don't see that in a practical sense it has any actual effect altho the
time pressure of "immediately" would be _quite_ unusual I would think if
that's really in there.

The estate will owe what it will owe and is obligated in good faith to
make good on those legitimate claims that there are.

In the case of limited assets and very large liabilities as another has
posted, I'd guess it'd probably end up in the probate court assigning
how those might be divied up. If there are sufficient assets and the
outstanding debts aren't just humongous it's pretty much generally
kinda' like "business as usual" except the executor or administrator is
writing the checks once receives that authority instead of the
individual previously.

The thing w/ lawyerese and all is that it's the words that matter and
without the precise wording itself but a paraphrase it's basically
meaningless. But, as noted, I'd think those specific conditions
wouldn't be in 1% of wills taken as a whole.

--

On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

On 5/14/2015 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.


I just noted that mine says first to pay all just debts and funeral
expenses. Guess they included funeral expenses since they will not
incur until after I die.

I tell people that doctors will not let you die as long as you still
have money.

On 05/14/2015 2:48 PM, J Burns wrote:
On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

In the three states I've dealt with specifically, there was no
distinction on _who_ or _what_ ; but the general rule that all expenses
are paid first before the rest is divvied up amongst the rightful heirs
is a given, yes.

If there's something left, good; if not, well, "too bad, sorry!"

--

On 05/14/2015 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?


Medical care is a high-stakes game.

If medical professionals don't use extreme measures and perform them flawlessly, they'll certainly be sued.
Seems to me if we demand perfect service from them, we had better pay them first.

So when grampa tips over from a coronary and you don't want huge medical bills, think carefully about who you call.

one way to look at it....

If you take your car to the garage and it never rides again,
do you pay the mechanic?

Mark

On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
--
"I am the infidel your Imam warned you about." Jan Morgan, Gun
Cave Indoor Firing Range operator.

On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
....

Only if estate approx. $5.4M (or twice that for joint as that's
individual exemption. If one has that size of estate; best be gettin'
the planning done now rather than just waiting for the time.

--

On 05/14/2015 3:16 PM, wrote:
one way to look at it....

If you take your car to the garage and it never rides again,
do you pay the mechanic?

Not sure I get the intended meaning here, but...

If it was taken and the work order signed before death, then "yes, the
estate owes the tab" when the work is completed unless somebody stopped
work in time to prevent there being an expense accrued.

Whether the owner ever drives the vehicle again or not is immaterial.

--

On 05/14/2015 3:37 PM, dpb wrote:
On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

....

Only if estate approx. $5.4M (or twice that for joint as that's
individual exemption)....

Congress passed the permanent $5M in 2012 with an inflation adjustment;
for 2015 the actual number per IRS is $5,430,000.

Annual gift tax exclusion limit is $14,000; it was not increased over 2014.

--

On Thursday, May 14, 2015 at 3:48:42 PM UTC-4, J Burns wrote:
On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

NJ? It's that everywhere. How could you possibly file an
inheritance tax return or anything to do with the disposition
of the assets of the estate, until you know the amount of all
the outstanding debts?

On 5/14/15 6:06 PM, trader_4 wrote:
On Thursday, May 14, 2015 at 3:48:42 PM UTC-4, J Burns wrote:
On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

NJ? It's that everywhere. How could you possibly file an
inheritance tax return or anything to do with the disposition
of the assets of the estate, until you know the amount of all
the outstanding debts?

Medical expenses can be especially complicated. A payment under the New
Jersey Death act for medical and similar expenses is added to the
estate. A judgment may be awarded without specifying the amount.
Anything paid by no-fault insurance must be subtracted from medical
expenses. Whatever was paid or reimbursed by Medicare or other medical
insurance cannot be deducted. Whatever was paid before death cannot be
deducted.

It sounds like a lot for a lawyer to sort out, so the boilerplate tells
the executioner to get on the stick.

On 05/14/2015 5:44 PM, J Burns wrote:
On 5/14/15 6:06 PM, trader_4 wrote:
....

NJ? It's that everywhere. How could you possibly file an
inheritance tax return or anything to do with the disposition
of the assets of the estate, until you know the amount of all
the outstanding debts?

Medical expenses can be especially complicated. A payment under the New
Jersey Death act for medical and similar expenses is added to the
estate. A judgment may be awarded without specifying the amount.
Anything paid by no-fault insurance must be subtracted from medical
expenses. Whatever was paid or reimbursed by Medicare or other medical
insurance cannot be deducted. Whatever was paid before death cannot be
deducted.

It sounds like a lot for a lawyer to sort out, so the boilerplate tells
the executioner to get on the stick.

The "executioner" has already done his part...else't there wouldn't be
no estate.

What do you mean by an "inheritance" tax return, anyway, specifically?
An inheritance isn't taxable. You mean the final estate return?

If so, nothing there sounds like anything out of the ordinary to
anywhere else; expenses and income still may accrue for quite some time
after the instant of passing.

It's not at all unusual for even a relatively simple estate to take a
year or more before it's settled; I still think any clause that says
anything about doing _anything_ immediately is pretty much bogus. Now,
maybe the sample wording came as a "service" from a medical service
provider "just being helpful".

--

On Thursday, May 14, 2015 at 6:44:19 PM UTC-4, J Burns wrote:
On 5/14/15 6:06 PM, trader_4 wrote:
On Thursday, May 14, 2015 at 3:48:42 PM UTC-4, J Burns wrote:
On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

NJ? It's that everywhere. How could you possibly file an
inheritance tax return or anything to do with the disposition
of the assets of the estate, until you know the amount of all
the outstanding debts?

Medical expenses can be especially complicated. A payment under the New
Jersey Death act for medical and similar expenses is added to the
estate. A judgment may be awarded without specifying the amount.
Anything paid by no-fault insurance must be subtracted from medical
expenses. Whatever was paid or reimbursed by Medicare or other medical
insurance cannot be deducted. Whatever was paid before death cannot be
deducted.

It sounds like a lot for a lawyer to sort out, so the boilerplate tells
the executioner to get on the stick.

What's the NJ Death Act? I googled, found nothing. And what
payment, from whom and for what exactly are you talking about
that gets added to the estate? I've never seen payments for
medical bills by Medicare or insurance treated as income.

If the person is elderly, under Medicare, then Medicare pays
most of the medical bills, supplemental insurance or the estate
would pay the rest. I don't see why anything would be "added
to the value of the estate. A judgement? For what? Where did
that come from?

AFAIK, in NJ an estate is handled the same way it is anywhere
else. You total up the assets, pay out the bills due, including
any final income tax, the money gets divided up among the heir
per the will, any state or federal estate tax is paid.

On 5/14/15 7:53 PM, dpb wrote:
On 05/14/2015 5:44 PM, J Burns wrote:
On 5/14/15 6:06 PM, trader_4 wrote:
...

NJ? It's that everywhere. How could you possibly file an
inheritance tax return or anything to do with the disposition
of the assets of the estate, until you know the amount of all
the outstanding debts?

Medical expenses can be especially complicated. A payment under the New
Jersey Death act for medical and similar expenses is added to the
estate. A judgment may be awarded without specifying the amount.
Anything paid by no-fault insurance must be subtracted from medical
expenses. Whatever was paid or reimbursed by Medicare or other medical
insurance cannot be deducted. Whatever was paid before death cannot be
deducted.

It sounds like a lot for a lawyer to sort out, so the boilerplate tells
the executioner to get on the stick.

The "executioner" has already done his part...else't there wouldn't be
no estate.

What do you mean by an "inheritance" tax return, anyway, specifically?
An inheritance isn't taxable. You mean the final estate return?


http://www.state.nj.us/treasury/taxation/pdf/other_forms/inheritance/itrbk.pdf

On Thu, 14 May 2015 15:48:38 -0400, J Burns
wrote:

On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

Unlike most bills, Medical bills would be deductible on the final
return so maybe that's one of the reasons someone specified paying
them right away?

On 05/14/2015 3:37 PM, dpb wrote:
On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
...

Only if estate approx. $5.4M (or twice that for joint ...

That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
agonna' happen".

--

On Thursday, May 14, 2015 at 9:59:42 PM UTC-4, Ashton Crusher wrote:
On Thu, 14 May 2015 15:48:38 -0400, J Burns
wrote:

On 5/14/15 12:12 PM, (PeteCresswell) wrote:
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.

In New Jersey, an attorney can't file an inheritance return until he
knows the amount of medical bills. It may be like that in other places.

Unlike most bills, Medical bills would be deductible on the final
return so maybe that's one of the reasons someone specified paying
them right away?

I assume you mean the final income tax return, if there is one.
A lot of folks die with just SS and some minimal interest or
other income, below the level where there is any tax due
or need to file. Medical bills *might* be deductible, but only
if you itemize deductions and the medical expenses exceed 10% of
adjusted gross income.

Even then, it seems bad to put in a will. All creditors really
should be dealt with equally. At the very best, giving preference like
that could lead an executor to make a very bad decision. Let's
say the estate only has $25K in assets and there are $25K in
medical bills. The executor just follows the bad instructions,
pays the medical bills, and there is no money to pay all the
other debts that total another $20K? Now, good chance you
could have some legitimate lawsuits, because those folks got
unfairly screwed.

On 05/14/2015 8:37 PM, J Burns wrote:
On 5/14/15 7:53 PM, dpb wrote:
....

What do you mean by an "inheritance" tax return, anyway, specifically?
....

http://www.state.nj.us/treasury/taxation/pdf/other_forms/inheritance/itrbk.pdf

(Another) Good reason to avoid NJ...

--

In article , dpb wrote:

On 05/14/2015 3:37 PM, dpb wrote:
On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
...

Only if estate approx. $5.4M (or twice that for joint ...

That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
agonna' happen".

--

My problem with the Estate Tax is that it is not a revenue raising tax,
never really has been. Even the supporters note that the main reason for
it is that people shouldn't be able to keep family money above a certain
level that offends the writers of the tax. To keep dynasties from
forming. Yeah, like the Rockefellers, Kennedys, etc. are all destitute.
It is an artificial event from a tax standpoint.
Personally I would do away with the estate tax, but also do away
simultaneously with cap gains ramp up at death. So any capital gains
taxes (really the only tax that makes sense in this context) would only
be collected when somebody sold the item (be it stock, family farm, etc)
and it wouldn't matter if the seller was first generation or 12th.
--
³Statistics are like bikinis. What they reveal is suggestive,
but what they conceal is vital.²
‹ Aaron Levenstein

"Kurt Ullman" wrote in message
...
In article , dpb wrote:

On 05/14/2015 3:37 PM, dpb wrote:
On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
...

Only if estate approx. $5.4M (or twice that for joint ...

That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
agonna' happen".

--

My problem with the Estate Tax is that it is not a revenue raising tax,
never really has been. Even the supporters note that the main reason for
it is that people shouldn't be able to keep family money above a certain
level that offends the writers of the tax. To keep dynasties from
forming. Yeah, like the Rockefellers, Kennedys, etc. are all destitute.
It is an artificial event from a tax standpoint.
Personally I would do away with the estate tax, but also do away
simultaneously with cap gains ramp up at death. So any capital gains
taxes (really the only tax that makes sense in this context) would only
be collected when somebody sold the item (be it stock, family farm, etc)
and it wouldn't matter if the seller was first generation or 12th.
--

BINGO!

All this talk about the wealthy (who pay the vast majority of the taxes) and
their tax benefits, and everyone else gets a step up in basis for FREE!
Billions and Billions in lost tax revenue.

"taxed and spent" wrote in message
...

"Kurt Ullman" wrote in message
...
In article , dpb wrote:

On 05/14/2015 3:37 PM, dpb wrote:
On Thu, 14 May 2015 15:08:31 -0500, dpb wrote:

If there's something left, good; if not, well, "too bad, sorry!"

Uncle Sam wants his share before the children get some. Tax a dead
man. The selfish *******. Spit!
...

Only if estate approx. $5.4M (or twice that for joint ...

That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
agonna' happen".

--

My problem with the Estate Tax is that it is not a revenue raising tax,
never really has been. Even the supporters note that the main reason for
it is that people shouldn't be able to keep family money above a certain
level that offends the writers of the tax. To keep dynasties from
forming. Yeah, like the Rockefellers, Kennedys, etc. are all destitute.
It is an artificial event from a tax standpoint.
Personally I would do away with the estate tax, but also do away
simultaneously with cap gains ramp up at death. So any capital gains
taxes (really the only tax that makes sense in this context) would only
be collected when somebody sold the item (be it stock, family farm, etc)
and it wouldn't matter if the seller was first generation or 12th.
--

BINGO!

All this talk about the wealthy (who pay the vast majority of the taxes)
and their tax benefits, and everyone else gets a step up in basis for
FREE! Billions and Billions in lost tax revenue.

Of course Obummer has a different idea: keep collecting the death tax AND
eliminate the step up in basis for those who paid the death tax. I don't
even know how many whammies that is, but it is sure more than a double
whammy.

"(PeteCresswell)" wrote in message
...
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.
--
Pete Cresswell

Aside from a question mark at the end of your question, you are missing the
tax implications.

By authorizing the executor to pay the medical expenses "immediately", the
will is seeking to obtain a possible double tax benefit: 1) deduct from the
decedent's final personal income tax return; and 2) have the value of the
estate reduced by the amount of the medical expenses paid. If the medical
expenses are not paid within the proper time limits, tax benefit #1 is lost.

From IRS Pub. 559:



Medical expenses paid before death by the decedent are deductible, subject
to limits, on the final income tax return if deductions are itemized. This
includes expenses for the decedent, as well as for the decedent's spouse and
dependents.



In 2014, medical expenses exceeding 10% of adjusted gross income (AGI) may
be deducted, unless the decedent or their spouse is age 65 or older. In that
case medical expenses exceeding 7.5% of AGI may be deducted.



Qualified medical expenses are not deductible if paid with a tax-free
distribution from an HSA or an Archer MSA.

Election for decedent's expenses. Medical expenses not paid before death
are liabilities of the estate and are shown on the federal estate tax return
(Form 706). However, if medical expenses for the decedent are paid out of
the estate during the 1-year period beginning with the day after death, you
can elect to treat all or part of the expenses as paid by the decedent at
the time they were incurred.

If you make the election, you can claim all or part of the expenses on the
decedent's income tax return (if deductions are itemized) rather than on the
federal estate tax return (Form 706). You can deduct expenses incurred in
the year of death on the final income tax return. You should file an amended
return (Form 1040X) for medical expenses incurred in an earlier year, unless
the statutory period for filing a claim for that year has expired.

The amount you can deduct on the income tax return is the amount above 10%
of adjusted gross income (or 7.5% of adjusted gross income if the decedent
or the decedent's spouse was born before January 2, 1950). Amounts not
deductible because of this percentage cannot be claimed on the federal
estate tax return.

On Friday, May 15, 2015 at 11:20:43 AM UTC-4, taxed and spent wrote:
"(PeteCresswell)" wrote in message
...
Every will I have seen so far contains boiler plate to the effect that
the executor is directed to immediately pay all medical expenses.

Seems counter-intuitive to me. Why not directives to pay all
lawn-maintenance expenses? All utility bills?... and so-forth.

What is so special about medical expenses - except for the potential for
a feeding frenzy by caregivers plus the huge difference between
insurance/Medicare payments and actual charges?

Seems like a bad idea on the face of it.

What am I missing.
--
Pete Cresswell

Aside from a question mark at the end of your question, you are missing the
tax implications.

By authorizing the executor to pay the medical expenses "immediately", the
will is seeking to obtain a possible double tax benefit: 1) deduct from the
decedent's final personal income tax return; and 2) have the value of the
estate reduced by the amount of the medical expenses paid. If the medical
expenses are not paid within the proper time limits, tax benefit #1 is lost.

From IRS Pub. 559:



Medical expenses paid before death by the decedent are deductible, subject
to limits, on the final income tax return if deductions are itemized. This
includes expenses for the decedent, as well as for the decedent's spouse and
dependents.



In 2014, medical expenses exceeding 10% of adjusted gross income (AGI) may
be deducted, unless the decedent or their spouse is age 65 or older. In that
case medical expenses exceeding 7.5% of AGI may be deducted.



Qualified medical expenses are not deductible if paid with a tax-free
distribution from an HSA or an Archer MSA.

Election for decedent's expenses. Medical expenses not paid before death
are liabilities of the estate and are shown on the federal estate tax return
(Form 706). However, if medical expenses for the decedent are paid out of
the estate during the 1-year period beginning with the day after death, you
can elect to treat all or part of the expenses as paid by the decedent at
the time they were incurred.

If you make the election, you can claim all or part of the expenses on the
decedent's income tax return (if deductions are itemized) rather than on the
federal estate tax return (Form 706). You can deduct expenses incurred in
the year of death on the final income tax return. You should file an amended
return (Form 1040X) for medical expenses incurred in an earlier year, unless
the statutory period for filing a claim for that year has expired.

The amount you can deduct on the income tax return is the amount above 10%
of adjusted gross income (or 7.5% of adjusted gross income if the decedent
or the decedent's spouse was born before January 2, 1950). Amounts not
deductible because of this percentage cannot be claimed on the federal
estate tax return.

Having a limit of one year after the date of death to pay
the medical bills in order to have them qualify for a tax
deduction I see. How that translates into boilerplate in
wills that directs the executor to "immediately" pay
all medical bills, that I don't get. It would seem to me
that it sets up the possibility for a naïve executor to
royally screw things up. If there aren't enough funds to
pay all the debts being one example. Follow that direction,
the other legitimate debtors get nothing? It would seem
it would make more sense to just point out the one year
time clock. Plus, a lot of estates, there isn't even going
to be any possibility to deduct medical expenses, because
they don't have enough income to even pay taxes.

dpb writes:
On 05/14/2015 8:37 PM, J Burns wrote:
On 5/14/15 7:53 PM, dpb wrote:
...

What do you mean by an "inheritance" tax return, anyway, specifically?
...

http://www.state.nj.us/treasury/taxation/pdf/other_forms/inheritance/itrbk.pdf

(Another) Good reason to avoid NJ...

While it doesn't apply to parents, children, spouse/partner or grandchildren,
it does, oddly, apply to siblings of the decedent as well as non-relatives.

On 05/15/2015 10:20 AM, taxed and spent wrote:
....

By authorizing the executor to pay the medical expenses "immediately", the
will is seeking to obtain a possible double tax benefit: 1) deduct from the
decedent's final personal income tax return; and 2) have the value of the
estate reduced by the amount of the medical expenses paid. If the medical
expenses are not paid within the proper time limits, tax benefit #1 is lost.

From IRS Pub. 559:
Medical expenses paid before death by the decedent are deductible, subject
to limits, on the final income tax return if deductions are itemized. This
includes expenses for the decedent, as well as for the decedent's spouse and
dependents.
....
Election for decedent's expenses. Medical expenses not paid before death
are liabilities of the estate and are shown on the federal estate tax return
(Form 706). However, if medical expenses for the decedent are paid out of
the estate during the 1-year period beginning with the day after death, you
can elect to treat all or part of the expenses as paid by the decedent at
the time they were incurred.

If you make the election, you can claim all or part of the expenses on the
decedent's income tax return (if deductions are itemized) rather than on the
federal estate tax return (Form 706). You can deduct expenses incurred in
the year of death on the final income tax return. You should file an amended
return (Form 1040X) for medical expenses incurred in an earlier year, unless
the statutory period for filing a claim for that year has expired.
....

Nothing there has any real urgency and hence the urging of "immediate".
As long as the election is made and the expenses paid within the year,
it's all immaterial as to whether it's the day after or 364 days after.

As trader also says, nothing posited so far providee any reason for such
a clause being included.

I haven't been in a situation where there weren't sufficient assets as
his concern raised poses so I don't know just what precedent is; I'd
assume there would be rules that state who's first in line just as there
are in bankruptcy and that'll get sorted out as part of the closing of
the estate. Surely do agree that just writing a check for everything to
one individual creditor even if they have a legitimate claim is unlikely
to be the (right) answer.

--

On 05/15/2015 9:58 AM, Kurt Ullman wrote:
In , wrote:
....

That said, I'm all in favor of the attempt by Farm Bureau and small
business org's to repeal the estate tax entirely (or move the exemption
level up to something _really_ sizable) but realistically it just "ain't
agonna' happen".
....
My problem with the Estate Tax is that it is not a revenue raising tax,
never really has been. Even the supporters note that the main reason for
it is that people shouldn't be able to keep family money above a certain
level that offends the writers of the tax. To keep dynasties from
forming. Yeah, like the Rockefellers, Kennedys, etc. are all destitute.
It is an artificial event from a tax standpoint.

My "problem" so to speak isn't "family money" but more related to
capital assets, etc., of family businesses and the like. Think of the
land value that is tied up in a working farm as just a common example
and the one the Farm Bureau particularly is concerned over. Owing to
the recent land evaluations it doesn't take much in some areas of the
country before one is in the bind and then family succession is often
difficult or even impossible since despite the on-paper valuation,
there's often nowhere near enough liquid assets nor cash flow to be able
to handle it. Consequently, land ends up having to be sold to pay
taxes. That "just ain't right!".

Personally I would do away with the estate tax, but also do away
simultaneously with cap gains ramp up at death. So any capital gains
taxes (really the only tax that makes sense in this context) would only
be collected when somebody sold the item (be it stock, family farm, etc)
and it wouldn't matter if the seller was first generation or 12th.

I don't know about that one...haven't really pondered it deeply enough
but on first blush I'm sorta' ok that needs to be a step up in basis
somewhere, somehow, any way.

--

On 5/15/15 1:52 PM, dpb wrote:

Nothing there has any real urgency and hence the urging of "immediate".
As long as the election is made and the expenses paid within the year,
it's all immaterial as to whether it's the day after or 364 days after.

As trader also says, nothing posited so far providee any reason for such
a clause being included.

1. Medical bills are usually big.

2. Between what's supposed to be billed to insurers and what's supposed
to be reimbursed, medical bills can be complicated to resolve.

3. Substantial items on medical bills may be open to dispute.

So the lawyer advises the client to instruct the executor to attend to
the medical bills immediately. Otherwise, the lawyer may not be able to
give the inheritor his money in time to get into law school.

On 05/15/2015 1:13 PM, J Burns wrote:
On 5/15/15 1:52 PM, dpb wrote:

Nothing there has any real urgency and hence the urging of "immediate".
As long as the election is made and the expenses paid within the year,
it's all immaterial as to whether it's the day after or 364 days after.

As trader also says, nothing posited so far providee any reason for such
a clause being included.

1. Medical bills are usually big.

2. Between what's supposed to be billed to insurers and what's supposed
to be reimbursed, medical bills can be complicated to resolve.

3. Substantial items on medical bills may be open to dispute.

All of those are even further reason to absolutely _avoid_ any rush to
immediate action.

So the lawyer advises the client to instruct the executor to attend to
the medical bills immediately. Otherwise, the lawyer may not be able to
give the inheritor his money in time to get into law school.

But ensure, meanwhile, possibly paying out more than might be necessary
if judicious care were taken for 2) and 3) in resolving any claims as
economically as possible for the estate's benefit. Just 'cuz the
principal's gone doesn't relieve the executor from his fiduciary
responsibility to manage the assets prudently and to the benefit of the
estate/ultimate inheritors.

It's still "just nonsense" as posited by OP; it would be interesting to
see an actual sample clause that raised the question rather than simply
a paraphrasing of an intent.

--

On Friday, May 15, 2015 at 2:53:01 PM UTC-4, dpb wrote:
On 05/15/2015 1:13 PM, J Burns wrote:
On 5/15/15 1:52 PM, dpb wrote:

Nothing there has any real urgency and hence the urging of "immediate".
As long as the election is made and the expenses paid within the year,
it's all immaterial as to whether it's the day after or 364 days after.

As trader also says, nothing posited so far providee any reason for such
a clause being included.

1. Medical bills are usually big.

2. Between what's supposed to be billed to insurers and what's supposed
to be reimbursed, medical bills can be complicated to resolve.

3. Substantial items on medical bills may be open to dispute.

All of those are even further reason to absolutely _avoid_ any rush to
immediate action.


+1

Seems if paying medical bills within the one year limit for
tax purposes is the issue, then the more logical thing to do
is just explain that issue in some detail in a letter to the
executor that goes along with the will. That way the executor
understands the issue, knows what the deadline is, can get tax
advice if needed, and proceed accordingly.

On 05/15/2015 7:57 PM, trader_4 wrote:
On Friday, May 15, 2015 at 2:53:01 PM UTC-4, dpb wrote:
On 05/15/2015 1:13 PM, J Burns wrote:
On 5/15/15 1:52 PM, dpb wrote:

Nothing there has any real urgency and hence the urging of "immediate".
As long as the election is made and the expenses paid within the year,
it's all immaterial as to whether it's the day after or 364 days after.

As trader also says, nothing posited so far providee any reason for such
a clause being included.

1. Medical bills are usually big.

2. Between what's supposed to be billed to insurers and what's supposed
to be reimbursed, medical bills can be complicated to resolve.

3. Substantial items on medical bills may be open to dispute.

All of those are even further reason to absolutely _avoid_ any rush to
immediate action.


+1

Seems if paying medical bills within the one year limit for
tax purposes is the issue, then the more logical thing to do
is just explain that issue in some detail in a letter to the
executor that goes along with the will. That way the executor
understands the issue, knows what the deadline is, can get tax
advice if needed, and proceed accordingly.

And, of course, those are _current_ tax rules; who knows what would be
the actual rule at the time? Tax advice, etc., doesn't got in the will
at all; details _will_ be different.

As I noted (in less detail) earlier, the only reason I can see for
something like the OP's original purported verbiage would be in the case
of a draft document drawn up by an attorney on a medical institution's
payroll and hence working for the institution and them then making this
available as a purported "service". Sleazy, but not out of the realm...

--

On Thu, 14 May 2015 16:01:28 -0400, Frank "frank wrote:



I just noted that mine says first to pay all just debts and funeral
expenses. Guess they included funeral expenses since they will not
incur until after I die.

I tell people that doctors will not let you die as long as you still
have money.

The doctor gave my friend 3 months to live. When he told the doctor he
couldnt' pay the bill yet, he gave him another 3 months.

On Fri, 15 May 2015 22:37:28 -0400, micky
wrote:

The doctor gave my friend 3 months to live. When he told the doctor he
couldnt' pay the bill yet, he gave him another 3 months.

A friend says she wants to be kept on life support so her pension
checks keep coming.