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My mom passed away two months ago. She received Medicaid/Medicare Hospice Care. Of course two weeks passed and Medicaid Estate Recovery inquired about her only asset, her house. However, the house was Quit Deeded to me. My mother had only one credit card in her name only which I paid out of my pocket just to keep her credit in good standing. I was told by my attorney not to pay her bills if I'm not a joint holder. Two weeks after I closed the account I received a letter from a major collection agency inquiring about her assets. She had two life insurance policies which I am the beneficiary. Should I cash in the policies and submit payment? I don't know.

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This depends on certain things. Who owned the life insurance policies and how much were they? Medicaid allows only a certain amount of life insurance if it is owned by the person receiving assistance. If you personally bought and owned the policy or maintained term life payments, then it would be okay.

What company wants payment for debt? When was the house deeded over to you? If the house was deeded to you within 5 years of Medicaid application, then MERP may have a claim on your house unless it is exempt for some valid reason. You won't be responsible for your mother's outstanding debts, such as credit accounts. However, MERP is something you will have to deal with.
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You are going to need an attorney specializing in Elder Law to advise you on the house situation. Ask him or her about the credit card debt also. I doubt it is your obligation.
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I'm assuming that the life insurance was either term insurance it whole life under the exempt amount for Medicaid. If you want to pay her credit card bill from that money that now is yours, ok. I wouldn't. Sorry but the credit card company or collection agency probably made enough off her when she was alive.
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Your getting the house quit claimed to you doesn't mean much. Medicaid will get it if you did it within five years of her applying for Medicaid. Yes, Elder Care Attorney now.

As to paying her past due bills from your own money? The answer to that is a definite no. YOU don't owe it. She does.

I'm sorry for your loss -- and then, when we have these kinds of problems? It only makes it that much harder.
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WHEN was the house quit claimed to you? If it was at least five years before she went on Medicaid you might be OK. If you quit claimed it after she went on Medicaid, or from the estate, you have a very big problem. Do not ignore the MERP calls, it will turn out badly.
Medicaid was probably never informed of the Life Insurance or they would have made her cash that in and spend it down. You need a good lawyer, NOW.
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