Medicaid estate recovery after death with a reverse mortgage?

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My mom passed a couple of weeks ago and had been 3 different nursing homes over the last 2 years in New York, my father had a reverse mortgage on their home in New York which mom inherited after he passed 7 years ago, medicaid was needed to pay nursing home bills for mom, I am one of 4 children, my brother was living with mom the entire time before she went into nursing home [well over 15 years including when my father was still alive] and bother had DPOA for mom sinse fathers passing. Doing my best to supply most relevant info, there is much more details twists and turns, so what i have read on this site so far is that bank will go after repayment of RM within 30 days [RM for moms home is apprx. 340K. market value of home is apprx. 600K] and that medicaid will want repayment of 2 years when mom was in nursing homes apprx. 250K. My question is after bank recoups its 340K after it moves to foreclose on home there will still be 260K leftover if they get 600K for it, will bank have responsibility to repay medicaid or is it on executor of her estate to pay? remaining 3 siblings [myself included] have been kept in dark by brother as he had DPOA over the years, he also still is living in moms house and he may be disabled on SSI, so as I had been reading also on this site that because he had been living with mom for more than 2 years before she went to nursing home [I suppose he would have to prove he was "caregiver"] and he could be disabled [not sure] but if these 2 points are true, would either one of these points or both be under the "Exemptions" part of MERP in which the 2 years of nursing home payments would not be pursued which in turn after all other outstanding debts were paid would the 4 heirs [siblings] split the remaining amount? Or, is the point moot because those Exemptions would only be valid if 'reverse mortgage' did not exist and brother was living in home?

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igloo posts that "each heir has to do their own exemptions" so disabled heir who lives out of state do they submit the MERP questionnaire [is this referred to as NOI notice of intent letter? not sure] to Medicaid estate recovery in the county where mothers house is located? to executor? or to surrogate court where estate is probated? Need clarification for this part of process. thanks.
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Partimeatty, NY requires a 7 month waiting period to settle estates. NOTHING gets distributed to heir for 7 months. NY also now goes after Trusts as a part of MERP. The Executor will have to deal with a complicated process.
I seriously doubt if a person on disability can afford the upkeep of a $600K home. That presents a major obstacle for the brother. PLUS if he inherits a large sum, his SSI or Medicaid would stop cold. Putting any of the assets in his name could create more problems than it would solve. Personally, I would want a good lawyer to help me avoid the pitfalls.
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You can always ask for confidentiality, I would be surprised if court would grant it. After all, the home is probably a big chunk of the estate, it usually is. Why wouldn't you tell them?
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also in addition to last question above can the disabled heir/sibling who files exemption: request to the attorney or the surrogate court that the fact that they are disabled is kept confidential from all parties involved i.e. [executor, other heirs, creditors, public, etc.] I believe executor will be sent MERP questionnaire where form specifically asks: "Is the decedent survived by a certified disabled child of any age? " and to "provide certification of disability" I believe that attorney most likely will be handling paperwork. Disabled sibling wants their disabling medical condition kept private from all eyes but logically at least Medicaid and whomever fills in MERP questionnaire form will know their disabled status that being executor or attorney.
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igloo and anyone else who may know:
Disabled heir/sibling who lives in different state from executor/brother does that heir need to contact brother or brothers attorney in order to file disabled exemption? Disabled heir/sibling has trust issues with brother and attorney helping him, another words can disabled heir/sibling request the NOI letter/form (from Medicaid or some other entity other than brother/attorney) to file disabled exemption on their own without getting involved with brother or his attorney?
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My understanding is - that most states put a time as to when probate must be opened. If family doesn't open probate, then the state can view them to have died intestate; & for the RM, the agreement will indicate by when settlement / payment must be done by. Under new HUD rules, lenders allow heirs up to 30 days to let them know what they plan to do & up to 6 mo to arrange financing for 95% of FMV. If family want the house, they have to pay off RM. If not, property can be foreclosed &/or sold on the open market. No gray area. If it’s an HUD backed RM (HECM /Home Equity Conversion Mortgage) & house sells for less than owed, HUD pay the difference to mortgage holder.

For MERP, your state's Medicaid website should have what are exemptions, exclusions and the cost-effectiveness minimum required for the estate recovery program and how all has to be documented. It's going to be very much interdependent on your state.

One important thing to keep in mind that each heir will need to do their own exemption or exclusion. It's just not simple.

I'd bet happens is that at the act of sale any proceeds left over (after RM is paid off) will either go into the estates account or an escrow-like account till it's determined if exemptions/exclusions are valid or proceeds left over all escheat to the state.

So your brother (who lives in the house, was caregiver and is executor) is planning on selling the house (600K value) to repay the RM (350K) and will have 250K left as proceeds from the sale, that's it, right? Medicaid paid 250K. 4 heirs of which 2 qualify for a Medicaid exemption and have done whatever documentation and filing within the time-frame in the NOI, right? What I'd bet happens is that those 2 heirs can get their 25% each of their proportional share of the final assets of the estate with the balance going to the state as it's a creditor of the estate which has 250K as assets.

Remember there will be all sorts of needed to be paid upfront costs of the estate…..probate atty fees, court costs, appraiser fees, funeral & burial costs, taxes, realtor commissions, property costs, etc. Executor brother could get executor fees paid as well. Whatever the case all that is established in probate as to who paid in what order. Atty will be busy & I hope they have experience in dealing with MERP.

Personally if I was a heir to an 250K valued estate with 250K Medicaid lien/claim & I had no exemptions or exclusions or no claims against the estate to submit to the court, I'd walk & not spend a penny on any aspect of the estate.
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1. Probate does not have a deadline, but read the reverse mortgage contract to see how long they give you.
2. Nothing stops MERP claims. A disabled person would only get a hardship exemption if they already live in the house. They would not be able to sell the house, just live there.
B. ALL the bills against the estate count against ALL the assets of the estate. Paying off one does not exempt you from the rest, especially MERP. The first creditors to foreclose will be unpaid property tax and reverse mortgage.
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igloo or anyone else please answer two questions in my last post. thanks.
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At this point as far as I know estate is in probate and lawyer contacted one of my siblings and stated that brother [who still lives in home and mother named as executor in will] is planning on selling house. My questions now are:

1. Is there a deadline established by probate as to when house will be sold? igloo says in first post that "family has 6 months to come up with repayment for reverse mortgage" does that mean if brother and or other heirs wanted to keep house pay them 350K or bank just wants their 350K and if you have to sell house to pay bank then you have 6 months to do so?

2. I need clarification on the role of exemptions for MERP:

A.Can brother or one of the other heirs file an exemption with MERP [one of my siblings who lives in a different state than where the house is located is disabled] after NOI letter is received and disabled proof is provided, will the disabled exemption stop the MERP claim? Anotherwords, the house is sold, the reverse mortgage is paid to bank and there is money left over does exemption put a stop to MERP claim on estate or collecting left over money after sale of home?

B. Do exemptions only apply if brother or other heirs decide to pay off reverse mortgage and keep home?
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Parti - ok so its 600K assessor value with 350k RM, right? 250K Medicaid?
Well unless bro has all the $ to pay off the RM, the house has to be sold.

Worrying about MERP exemptions, % heirship, probate, etc is a waste unless the RM is dealt with first & foremost. Not to sound harsh, but if he doesn't have the $, all totally on his own, then none of the other stuff matters; for you or other family to spend a dime on the property, or get themselves entangled w/RM or MERP, imo would never have any benefit unless you all have a ton of $$$ to spend with risk & like getting pissed on. RM gets their 350K first and any $ left over will be paid to the state at the act of sale. If one of you wants to deal with opening probate, you can but probably only the hard costs for probate (the legal fees to atty and the court costs) would be paid. The executor would have to front all costs first and do all their time for free as the estate will have no $ once RM and MERP is paid other than the tiny amount for legal & court.

Does bro have 350large right now in the bank for the RM? and another 10K or so for future house costs?

The caregiver exemption is terrific but the caregiver has to have the funds to afford the house. What happens based on posts on this site, is usually a daughter stops their career and moves home to take care of their folks. In the process, she spends her own nest egg and stops short the building of her own retirement. It all works out for awhile as the parents own their home and have SS & retirement so expenses are covered. But once the parents go into a NH, there is no more $. So the caregiver can get the home, but can't afford it. This is to me the real Shakespearian tragedy for caregiving.

About the caregiver exemption, for the state I'm familiar with, they have to provide to the state a letter from the elders MD or SW (on their letterhead with state registration info) as to what caregiving was provided and why it was needed. Whether this would be easy or hard to get would just depend on the situation.

Your bro might could get the caregiver exemption, but if he cannot afford all the costs on the house from now till forever after he's paid off the RM, it's going to go to tax sale and still have the MERP cloud on it as that is how his state does the exemption as Pam said. Or catch on fire and not have any insurance coverage & still have the MERP cloud. Or some other dramarama. Is this perhaps accurate?
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