Sunday, January 15, 2017

Take That Step

This past year, I had the opportunity to go skydiving. What a blast! I had wanted to skydive for a while so I was anxious to jump out. However,  when you are on the edge of the plane door, looking out at the ground several thousand feet below you, a slight pause is a natural feeling. Thinking about your possible demise can be unnerving. Similarly, sometimes doing your estate planning can have the same feeling.  Unfortunately death is a certainty for all of us and it doesn't necessarily get any easier later on.
As I stood on the edge of the plane, I didn't pause long as my tandem guide jumper basically pushed me out (with him and the parachute thankfully).  My job as your estate planning attorney is to do the same thing. Push you out of the plane!  Or, better yet, to get your affairs in order (just in case that parachute doesn't open).

2 comments:

Anonymous said...

Hi Matthew, I have a question which I am hoping is a simple answer, but I have spent countless hours researching with no luck.

Is the surviving spouse obligated to pay a deceased spouse's medical debt after it has been discharged by an Iowa court through the probate process? Can the creditor send this discharged debt to collections, affecting the surviving spouse's credit score?

Background: My wife passed away about two years ago. She died intestate, and an estate was set up shortly afterward. She had very few assets and quite a bit of debt. Most was student loan debt that was discharged, but there was also medical debt. The estate was deemed insolvent and all debts were discharged by a court several months ago. Recently, one of her medical creditors has been contacting me claiming that I owe her remaining balance. They are sending increasingly urgent statements saying I need to contact them to prevent further recovery efforts. I provided them the court order showing the debt has been discharged, but their leadership team that reviewed it claims that I owe it due to doctrine of necessities. I have been told previously by the lawyer that handled my estate that I do not owe this debt as it has been discharged. My concern is that the creditor will attempt to send it to a collection agency, which will affect my credit rating. Does a discharged debt mean that this creditor can no longer legally collect from me as the spouse? Thank you for your time.

Matthew Gardner said...

Well, I will give your wife's creditors points for creativity. First, did you sign anything yourself obligating you to pay for those expenses? (I'm guessing not, otherwise they wouldn't be reaching.) There is a doctrine of necessities, but it is not exactly a frequently used provision, going back about 50 years is the last mention I find here in Iowa. Other states have basically stated that the doctrine is there to force the husband to take care of his wife, not for creditors to use as a tool.

Cite them this Iowa Code section, and then get an attorney to dispense with them if they don't go away:

597.17 Liability for separate debts.
Neither husband nor wife is liable for the debts or liabilities of the other incurred before marriage, and, except as herein otherwise declared, they are not liable for the debts of each other contracted after marriage; nor are the wages, earnings, or property of either, nor is the rent or income of the property of either, liable for the separate debts of the other.