My aunt died in 2010 and left her home to me. MS Medicaid estate recovery says I owe them money for nursing home. Just now able to sell her home. Can they still collect?
You are referring to MedicAid (or in California, MediCal). Medicare does not collect like that. Generally speaking there shouldn't be any action to collect from equity in the house till the kids become adults. What is the source of cash you now have for the kids? Maybe it is exempt. Consult with an elder law attorney who specializes in Medicaid eligibility.
We live in California And my father died in September 2015 and has 2 minors under the age of 21 now living with their mother I Am his son and executive of his estate and Medicare recovery is trying to collect for medical expenses. all of the research says they can't collect, but my fear is that they can proceed after the minors turn 21. I'm holding money that I want to give to the children, but can't release it until I can get a dismissal letter. Suggestions?
The Collection statute for IRS is 10 years and can be extended for a variety of reasons. I think you may be thinking of going back in years to assess a tax bill when fraud is found. A federal jury this week in Las Vegas found three men guilty in a tax fraud case that cost the government $234 million. I think they each had about 20 counts against them. Let's face it, a business is going to write off some debts when they can't collect it for whatever reason. The government can do that too. It normally has a decade to do that. How many years would you like to beat a dead horse?
Vegas - I thought IRS could run it out forever for civil tax fraud? I doubt they do as burden of proof would be hard but I think they can for civil. Maybe not
With MERP still in the early years for the states to have in place & collect from, I would imagine that just what happens will be different in each state as state laws vary for probate. For TX, MERP has pretty exact statute of limitations for how MERP contacts the estates representative (within a year of death). I think 1 big reason why TX and likely other states have outsourced MERP to contractors like HMS & PCG, is that state employees could not manage to do the paperwork with the precise detail of forms & paperwork required legally to enforce MERP. But the big issue I have with MERP is that family & heirs are often clueless as to what taking Medicaid for NH can mean. It's up to the family to file whatever to get exclusions, exemptions or hardships to get the possible claim decreased or not done at all. I think it's 4 weeks from the date on intent letter to do all this for TX. For most families, they are either still grieving or really have no idea of what the letter means or their non-response will cause or understand fully that by taking Medicaid means possibly a claim or lien on the home. I'd bet a case of Processco that 40% of all homes that get a MERP claim or lien would have had qualified for one or more of the exemptions, exclusions or hardships but family didn't understand they had to file with documentation to get these done.
Most states have the hardship exemption. For TX it's at 100K and I think for MS it's 75K (or 65K); for LA it's whatever the parish has set as it's homestead exemption if they do that (like for New Orleans it's 75K). If you get a MERP intent to file letter at the minimum you should file the hardship if the property's tax assessor value has it under the limit. But it has to be done in the short window under your states MERP regs. What will be really sad is if Aunt Wilma's MS house was worth 50K and she could have filed for a MERP hardship release and avoided any of this happening.
IRS liens do have a collection statute of limitations, which is generally 10 years. This can be extended by a variety of circumstances, but the point is that even tax debts expire...nothing lives forever.
AuntWilma - MERP is not like a traditional debt claim w/whatever your state has as it's Statue of Limitations. It's more like IRS or governmental one with no cut-off. Once the lien or claim is there, you really are limited to what you can do.
Couple of suggestions & a ?: ? what happened in probate? Did the attorney file the will and did the judge award the assets according to the will so that you got the house & did you change all at the courthouse so that you now own it, in your name and everything legally changed & current (like tax bill in your name & paid by you)? Is it the situation that you own the house but are trying to sell it; & the buyer can't get title insurance because of MERP claim so they can't get the mortgage??
Suggestions: 1. if you don't have all the filed legal on the property, you need to get that from the courthouse. Most larger MS counties (Harrison, Hinds) have everything filed on the property available on-line as a downloadable document. Cost is pretty minimal too, like $ 3.50 for a warranty deed. All this will be tied into the parcel number - that is the key to everything on the property. If you can find an old tax assessor bill the parcel # will be on it; otherwise you have to go to county records. What you are looking for is to see if & when the MERP action was filed and to see if all was done correctly. Personally I would get all documents on the property so that you have a full history on the property. You can request being paid for this from the proceeds of the sale too - so get a receipt.
2. If the attorney did probate correctly, there should have been notices placed in the paper. Like for Harrison Co., it would be in the SunHerald classifieds under "Summons". Get the 3 dates that this was done from the probate attorney. If you can, you want a copy of the actual newspaper in which the notices appeared. Most probate attorney's scan the notices and place in the file as this is a billable charge doing probate. Did MERP send a letter of the claim against the estate within the time frame indicated in the notice to the attorney whose name & address was in the notice? Did your probate attorney do a title search on the property before it was awarded to you (a good attorney would have)?
3. MERP should have sent a letter to the deceased person's representative on file anywhere from 1 month to 6 months after her death. Sometimes sent to the property. This is MERP's "intent to file a claim" letter. It would read something like…"we are sorry for your loss. State paid $ 134,567.00 for Aunt Wilma's care, which we are required to have reimbursed to the state". The letter will give the overall tally of all things Medicaid & is not what MERP is owed. What MERP can get is based on whatever the deceased assets (the house) sells for. Letter would have had a specific time-frame in which MERP had to get a response. If you didn't respond that you would be filing an exemption, exclusion or other hardship & providing the documentation for them, then MERP's claim is viewed as valid and a lien can be placed. Any idea who got the letter & what happened? I would send a registered letter to MERP to ask for a copy of the original intent to file letter. If they did not send one, then you could ask for the claim to be lifted.
If MERP did everything they need to under MS rules & you did not file exemptions, etc. then until you come to an agreement w/MERP the claim or lien will stay. MERP is in their Medicaid application and is done as an acknowledgement of participation, neither Aunt Wilma or you or anyone had to specifically sign off to agree to MERP either. By applying for Medicaid, you agreed to the rules.
4. Now the actual amount MERP can get is limited to only whatever funds are assets of the estate at the time. So if Aunt Wilma's house at probate was worth 50K (the value should have been in probate proceedings) but now sells for 70K then all MERP can get is the value @ probate if this was documented. If the amount MERP wants to remove the claim or lien is more than the anticipated sell price, you need to send a registered letter to MERP on this and get this worked out before you go to act of sale.
5. If the existence of the claim came up by a title company doing this for the buyer, you kinda are in a total bind till you come to an agreement with MERP on what amount will satisfy the claim to have it removed or lifted. Really its hard to sell a property that doesn't have a clean, clear title easily. Mortgage companies really won't loan without title insurance issued anymore.
If you are about to loose the sale, you may be able to buy an indemnity policy from the title company that will cover the amount of the MERP claim. Title company can then issue the buyer a policy for the mortgaged amount. You as the seller pay for the indemnity & then work it out with MERP - indemnity policies aren't cheap but can be done. You have to have really good credit to get one too.
If a title company finds a cloud on the title, you are toast on selling the property to anyone who needs to get financing till it is removed. Realtor has to have the title issues mentioned on the disclosure statement on the property too from now on too. Unfortunately you are going to have to come up with an agreement with MERP if you want to sell the property in a traditional sale. My mom still has her home and I keep up with her state's MERP stuff, for TX MERP (which is done by an outside contractor who are paid 16% of recovery plus expenses), MERP will issue a 2 page statement that is a release of MERP class 7 claim & reads specific to the county & parcel #. It needs to get filed at the courthouse and a copy brought to the act of sale. I would imagine that MS MERP also has a specific document that will be required to clear the title & finalize the act of sale. None of this will be simple. Good luck.
The lawyer's hands are tied if the house went through probate. So now you have a "short sale" meaning the closing will be complicated, the Medicaid lien is paid off at closing and you definitely need a lawyer to do that. If the lien is more than the house sells for your attorney has to get MERP to agree to take the lesser amount.
yes, I do have a law who probated the will and Medicaid did put a lien. But four years has passed and we have been unable to sell until now. My lawyer is useless,
Mississippi has taken a more conservative approach, limiting estate recovery to assets that are included in the Mississippi probate estate. As noted above, the Mississippi statute does not expand the definition of “estate” beyond the traditional probate estate. As a result, Medicaid must look only to the assets that pass through the decedent’s Mississippi probate estate. So was there a probate proceeding? If not, they should not be bothering you. If there was a probate proceeding and they did not present a claim, they should not be bothering you four years later. Don't put up with unfair debt collection. Tell them to "cease and desist" or you will turn them in to the MS State Attorney General's office. Then write a letter to the State Atty general and file a formal complaint. Be sure you know the date, time, who called and what bill collection agency and phone number they called from.
Absolutely agree on consulting an elder law attorney. There are complex issues here that require an attorney's knowledge and perspective.
In the meantime, these sites offer some insight into the issues and complications, which aren't always clear cut in the issue of Medicaid recovery:
fortenberrylaw/mississippi-medicaid-probate/
Were you also the Personal Representative of your aunt's estate or did someone else handle this aspect? If the latter, do you know if they were aware of the Medicaid claim?
Each state has different laws for medicaid recovery. Generally there is a statute of limitations of one year for all claims. However, did medicaid place a lien on the property for their repayment within that year? if so, that is now due. If they placed no lien, or made no claim, or if the property was TOD or avoided probate in another way they would not have been able to place a lien.
Either way, it would be the estate that would owe the money, not you personally unless they are enacting filial law against you. If they are trying to collect from you personally, you may be in a state that has filial laws, requiring children to repay their parent's debt. (Mississippi does have such a law, I believe that's where you are from). If that is the case you may be in for a legal battle. Again, I recommend a lawyer.
With MERP still in the early years for the states to have in place & collect from, I would imagine that just what happens will be different in each state as state laws vary for probate. For TX, MERP has pretty exact statute of limitations for how MERP contacts the estates representative (within a year of death). I think 1 big reason why TX and likely other states have outsourced MERP to contractors like HMS & PCG, is that state employees could not manage to do the paperwork with the precise detail of forms & paperwork required legally to enforce MERP. But the big issue I have with MERP is that family & heirs are often clueless as to what taking Medicaid for NH can mean. It's up to the family to file whatever to get exclusions, exemptions or hardships to get the possible claim decreased or not done at all. I think it's 4 weeks from the date on intent letter to do all this for TX. For most families, they are either still grieving or really have no idea of what the letter means or their non-response will cause or understand fully that by taking Medicaid means possibly a claim or lien on the home. I'd bet a case of Processco that 40% of all homes that get a MERP claim or lien would have had qualified for one or more of the exemptions, exclusions or hardships but family didn't understand they had to file with documentation to get these done.
Most states have the hardship exemption. For TX it's at 100K and I think for MS it's 75K (or 65K); for LA it's whatever the parish has set as it's homestead exemption if they do that (like for New Orleans it's 75K). If you get a MERP intent to file letter at the minimum you should file the hardship if the property's tax assessor value has it under the limit. But it has to be done in the short window under your states MERP regs. What will be really sad is if Aunt Wilma's MS house was worth 50K and she could have filed for a MERP hardship release and avoided any of this happening.
Couple of suggestions & a ?:
? what happened in probate? Did the attorney file the will and did the judge award the assets according to the will so that you got the house & did you change all at the courthouse so that you now own it, in your name and everything legally changed & current (like tax bill in your name & paid by you)? Is it the situation that you own the house but are trying to sell it; & the buyer can't get title insurance because of MERP claim so they can't get the mortgage??
Suggestions: 1. if you don't have all the filed legal on the property, you need to get that from the courthouse. Most larger MS counties (Harrison, Hinds) have everything filed on the property available on-line as a downloadable document. Cost is pretty minimal too, like $ 3.50 for a warranty deed. All this will be tied into the parcel number - that is the key to everything on the property. If you can find an old tax assessor bill the parcel # will be on it; otherwise you have to go to county records. What you are looking for is to see if & when the MERP action was filed and to see if all was done correctly. Personally I would get all documents on the property so that you have a full history on the property. You can request being paid for this from the proceeds of the sale too - so get a receipt.
2. If the attorney did probate correctly, there should have been notices placed in the paper. Like for Harrison Co., it would be in the SunHerald classifieds under "Summons". Get the 3 dates that this was done from the probate attorney. If you can, you want a copy of the actual newspaper in which the notices appeared. Most probate attorney's scan the notices and place in the file as this is a billable charge doing probate. Did MERP send a letter of the claim against the estate within the time frame indicated in the notice to the attorney whose name & address was in the notice? Did your probate attorney do a title search on the property before it was awarded to you (a good attorney would have)?
3. MERP should have sent a letter to the deceased person's representative on file anywhere from 1 month to 6 months after her death. Sometimes sent to the property. This is MERP's "intent to file a claim" letter. It would read something like…"we are sorry for your loss. State paid $ 134,567.00 for Aunt Wilma's care, which we are required to have reimbursed to the state". The letter will give the overall tally of all things Medicaid & is not what MERP is owed. What MERP can get is based on whatever the deceased assets (the house) sells for. Letter would have had a specific time-frame in which MERP had to get a response. If you didn't respond that you would be filing an exemption, exclusion or other hardship & providing the documentation for them, then MERP's claim is viewed as valid and a lien can be placed. Any idea who got the letter & what happened? I would send a registered letter to MERP to ask for a copy of the original intent to file letter. If they did not send one, then you could ask for the claim to be lifted.
If MERP did everything they need to under MS rules & you did not file exemptions, etc. then until you come to an agreement w/MERP the claim or lien will stay. MERP is in their Medicaid application and is done as an acknowledgement of participation, neither Aunt Wilma or you or anyone had to specifically sign off to agree to MERP either. By applying for Medicaid, you agreed to the rules.
4. Now the actual amount MERP can get is limited to only whatever funds are assets of the estate at the time. So if Aunt Wilma's house at probate was worth 50K (the value should have been in probate proceedings) but now sells for 70K then all MERP can get is the value @ probate if this was documented. If the amount MERP wants to remove the claim or lien is more than the anticipated sell price, you need to send a registered letter to MERP on this and get this worked out before you go to act of sale.
5. If the existence of the claim came up by a title company doing this for the buyer, you kinda are in a total bind till you come to an agreement with MERP on what amount will satisfy the claim to have it removed or lifted. Really its hard to sell a property that doesn't have a clean, clear title easily. Mortgage companies really won't loan without title insurance issued anymore.
If you are about to loose the sale, you may be able to buy an indemnity policy from the title company that will cover the amount of the MERP claim. Title company can then issue the buyer a policy for the mortgaged amount. You as the seller pay for the indemnity & then work it out with MERP - indemnity policies aren't cheap but can be done. You have to have really good credit to get one too.
If a title company finds a cloud on the title, you are toast on selling the property to anyone who needs to get financing till it is removed. Realtor has to have the title issues mentioned on the disclosure statement on the property too from now on too. Unfortunately you are going to have to come up with an agreement with MERP if you want to sell the property in a traditional sale. My mom still has her home and I keep up with her state's MERP stuff, for TX MERP (which is done by an outside contractor who are paid 16% of recovery plus expenses), MERP will issue a 2 page statement that is a release of MERP class 7 claim & reads specific to the county & parcel #. It needs to get filed at the courthouse and a copy brought to the act of sale. I would imagine that MS MERP also has a specific document that will be required to clear the title & finalize the act of sale. None of this will be simple. Good luck.
So was there a probate proceeding? If not, they should not be bothering you. If there was a probate proceeding and they did not present a claim, they should not be bothering you four years later. Don't put up with unfair debt collection. Tell them to "cease and desist" or you will turn them in to the MS State Attorney General's office. Then write a letter to the State Atty general and file a formal complaint. Be sure you know the date, time, who called and what bill collection agency and phone number they called from.
In the meantime, these sites offer some insight into the issues and complications, which aren't always clear cut in the issue of Medicaid recovery:
fortenberrylaw/mississippi-medicaid-probate/
Were you also the Personal Representative of your aunt's estate or did someone else handle this aspect? If the latter, do you know if they were aware of the Medicaid claim?
Each state has different laws for medicaid recovery. Generally there is a statute of limitations of one year for all claims. However, did medicaid place a lien on the property for their repayment within that year? if so, that is now due. If they placed no lien, or made no claim, or if the property was TOD or avoided probate in another way they would not have been able to place a lien.
Either way, it would be the estate that would owe the money, not you personally unless they are enacting filial law against you. If they are trying to collect from you personally, you may be in a state that has filial laws, requiring children to repay their parent's debt. (Mississippi does have such a law, I believe that's where you are from). If that is the case you may be in for a legal battle. Again, I recommend a lawyer.
Angel