As an executor managing an estate, one responsibility is closing the deceased’s accounts and paying their final bills.
When Aileen Gunther, a New York lawmaker, was paying her late mother’s final cable bill last summer she was shocked to see how high the bill was. Further review showed her mother had been charged an early termination fee for breaking her contract because she died.
Gunther, a Democrat from Sullivan County, is now proposing to institute a ban in New York on the practice of charging a fee when an account is cancelled early due to the subscriber’s death. Gunther’s Bill A8630 was submitted to the New York State Assembly in December and is awaiting action.
According to the bill, “providers of telephone, cellular telephone, television, Internet, energy or water services” would be prohibited from “imposing a termination or early cancellation fee if a customer has deceased before the end of such contract.”
“Many companies use early termination fees to ensure a customer continues use of a service through the contract length,” Gunther writes in the bill. “There have been instances where these companies have charged early termination fees to accounts cancelled prior to the expiration of the contract due to the customer’s death. This legislation would prohibit this unseemly demonstration of corporate greed.”
Violations of the ban would be punishable by a civil penalty of up to $1,000 if the bill is passed. The bill is currently before the Assembly’s Consumer Affairs and Protection committee.
While laws such as the one proposed by Gunther would spare consumers from being charged these fees in the first place, it is important to know that not all service providers charge an early termination fee when someone dies. And in some cases where a cancellation fee is charged to a deceased person’s account, it is done in error and can be removed.
So what are you to do as executor?
While laws like Gunther’s, if passed, will further protect the assets of a deceased person’s estate, there are often still ways to avoid paying early termination fees when a contract is broken due to death. As executor, it is important to question these charges and make sure you are protecting the assets of the estate. While it can be time consuming to do so, fees can be costly and paying them blindly can lead to accusations of financial carelessness, unhappy beneficiaries, and a shortage of cash to handle other estate matters.