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JWWING43

Dealing with a Large Check

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A woman became ill with a serious form of cancer that over the course of about 7 years took her life. She had been deserted by the man who she was married to when the illness began and during the time, she had to be transported to a large metropolitan area by helicopter. The expense was something like $42,000. The insurance company paid off, but not directly to the provider, so the check for out-of-network coverage of $26,000 is sent to the woman at her address. But she is not at home, being in another city for treatment at the time. Her husband takes the check and 'loses' it while divorcing her. The bill is sent to collection and the attempts to collect it are finally discontinued. 

Four years after the check was initially cut by the insurance agency, the woman dies from her illness and is buried. Her parents who supported her (she lived with them) paid for her burial and interment. However, since she had virtually no income and was unable to work, just barely able to maintain her insurance until she finally went on Medicaid for her medical expenses which were many. Her parents also decided to not become executors because she was intestate and destitute. She did have children, but taking care of the estate was not interesting to them. so the final arrangements and such was left to the woman's parents.
Then the unthinkable happens, the insurance company finds that the check has not been cashed. They sent a letter notifying the woman, now deceased, that the check has not been cashed. The woman's father writes a letter to the insurance company apprising them of the situation, not expecting any response, but instead, the insurance company provides them with a check made out to the estate of the woman only. Who does this money belong to. Since there is no executor, the check can not be submitted for payment.

What is the responsibility of the family? Do they need to determine where the money originally intended or is this money part of the estate? Since no one is named as the executor because none was expected to be required, who can cash the check? In other words, would the family be required to now go through the process of being named the administrator by a judge in order to cash the check?

Is there a better way to handle this, such as submitting the check to the person who was not paid for their services and allowing them to go through the legal motions of becoming executor in order to get the funds paid, but then wouldn't they be required to pay the last expenses, etc., before they would be in line to receive the payment toward their bill?

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8 hours ago, JWWING43 said:

Is there a better way to handle this, such as submitting the check to the person who was not paid for their services and allowing them to go through the legal motions of becoming executor in order to get the funds paid, but then wouldn't they be required to pay the last expenses, etc., before they would be in line to receive the payment toward their bill?

Yes and yes.  

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How would one go about that? First, (which you were not told) the business who did the transport is unknown, but they did turn it over to a collection agency so I assume that the collection agency would be the place to start. So the notice that a check has been received is sent to the collection agency. They will have to determine whether or not it is worthwhile to become executor to get the money. Or is there a shortcut for them to receive the check?

Would the parents and family then be notified about the fact? Would they be allowed to make their claim for burial expenses, etc. against these funds? These expenses come off the top, don't they, or are the burial expenses on even footing with other bills she might have had? By becoming executor they might actually be opening a can of worms, right? Other bill collectors can force them to share this check that was intended for them only. Or do they have a special feature to protect them? I am assuming that the original bill has been written off as uncollected and that the money goes to her estate. However if I am wrong, then I need to find out to whom it should be sent asap because it has a 6 mo time period to present for payment.

I am thinking that the parents should not even attempt to mess with this other than to let the collection agency know that the check is available. Even though they spent $7,000 for burial and paid for other expenses, the two do not compare in worthiness since this money was intended for the original service provider. What I am concerned about is that the parents of the deceased will end up spending hours of time and be forced to retain a lawyer to keep the other collection agencies from coming after them for payment of medical bills which were unpaid along the way. She was forced out of regular insurance and onto Medicaid because the copays became too high - several were left unpaid, I believe.

 

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What state did the death occur in and how much is the check?

 

The check is an asset of the estate only and there is no shortcut to cashing it.  Find out (by doing an online search) what the executor fee is for your state (probably a certain small percentage) and then hire the services of a probate attorney to handle this for you.  After the estate is opened, a notice will be published in a local newspaper about the estate being opened and if the creditors see it, the creditors can file a claim to be paid.  You just might "get lucky" if the business who did the transport may not see the notice and may not file a claim to be paid.  Do NOT contact a collection agency about the unpaid bill unless you or your attorney wants to negotiate reducing the amount of the bill.   Reimbursement for the funeral expenses is most likely possible.

 

You can discuss your options with an attorney before you decide whether you want to open probate or not.  I somehow think that you (or whoever the beneficiaries are) will end up with a few thousand dollars after the creditors are paid.

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I would be wary of not notifying the creditor about the receipt of the check.  Texas requires the administrator of an estate to give notice by mail to any creditor who has a secured debt.  A good argument can be made that the rransporf company has a secured  interest in the proceeds of the check in the nature of a constructive trust.  The opinion of an attorney should be sought before acting on the estate.

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Referring to the comments by K and R previously: This is in the state of Texas. The parents of the deceased have expended sums of money to bury their daughter and to clean up her business which she was unable to do. Right up until her death she was unwilling to trust anyone and kept all of her dealings to herself - probably due to medications in part. There are plastic storage boxes full of medical information, and they are in no condition to deal with all of this. That is why I was asking here.
They thought that, since the deceased was intestate and destitute, they could do the things that an administrator of the estate would do and no probate would be required (based on internet and county clerk of court information they had gathered). This check has thrown a monkey wrench into that plan. But most of the administrative work is already complete - all of her accounts are closed and it has been 6 months since she passed. 

The check was for about 1/2 of the bill from the service provider and is in excess of $20,000. If the check had not been 'lost', it would have been sent to the transport company and the remaining balance left due - unpaid. The deceased and her husband had no way to pay the additional amount. But now, the check is a real problem. There is no administrator to sign the check. The money does not belong to her estate - it belongs to the transport company. If it does belong to the estate, the proceeds would only be eaten up by the other creditors. All that might happen is that if someone is appointed as administrator, the parents will have to attempt to account for everything that has been done to this point and go through all of this again. And then they will have to prove their claim to expenses against the estate. That may be the only thing that might pay off for them, if the money does become part of the estate.

I think that you can understand their reluctance to do that - it has been a very trying time and now it will start all over again.

What I am understanding from your input is that the parents must now contact a probate attorney and explain what has happened. And if he is in agreement, put the case into probate (they might be too late) so that the attorney can handle it all as administrator. That is what I plan to tell them.

 

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You said that the check for out-of-network coverage was sent to the woman at her address. while she was alive.  Who would have been the payee on that check--the provider or the woman?

 

Maybe her father could contact the insurance company and ask them if they want him to return the check so they can re-issue it to the provider, or would he want to contact the provider to send the provider a copy of the check and then ask the provider to contact the insurance company to ask them to reissue it to the provider?

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The original check was issued to the deceased because the insurance company does not pay directly to a not in-network provider. They expect the insured to pay the out of network provider and then they reimburse the insured based on a lower rate schedule (like 50% as opposed to 75-80%). The original check was lost by her soon-to-be ex who wished to make trouble for her. At the time she was going through multiple surgeries attempting to arrest the cancer (living with her parents), and he was being a putz about unimportant things and was angry with her for being sick all of the time.

As I understand it, the insurance company recently sent a letter to the deceased to notify her that a check written almost 4 yrs ago had not been submitted for payment. They appeared to be unaware of her passing. The parents called the number on the letter and asked about it and then followed up with a request that the insurance company reissue the check. However, the insurance company reissued the check to her estate rather than to her or to the provider, stating that they could not issue the check to the provider because they were 'not in-network providers.

That suggests another method - they could just ignore the check and the money reverts to a fund they use for large pay-outs. 

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Is the check made to the estate or to the daughter?  Thought there wasn't an estate.

 

Anyway, If the parents call the insurance company, tell them their daughter has passed, and ask for the check to be re-issued in the parents name, I'll bet the insurance company would do it. 

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