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My son died 18 months ago. He was disabled & had a trust account set up from a lawsuit we had settled on his behalf. The proceeds were divided among his heirs (his father and I) as directed by the trust agreement as well as the the probate court in January 2016 where it was also decided they would be the executors of his estate. The funds were to be dispersed by March or April. I had received a statement from the bank that holds the account & it was zero with no explanation. After a few phone calls, I learned of DADS intent to file for recovery of in excess of 600K. The trust itself has a cash value of less than 200K and it is being held in a "special account" pending this NOI. Besides the bank not being forthcoming with monthly statements now that the trust itself has been liquidated, I have to wonder if there is a time limit DADS must adhere to regarding recovery. I'm also wondering if the proceeds are somehow off limits to them since provisions of the trust stated the balance was to pass to my son's heirs.


My son lived most of his adult life with his father as we were divorced and he was his guardian. I have just learned his father passed away Sunday & now have to wonder if that, too, has some bearing on all of this.

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My first thoughts are that If your son died December, 2014 then his representative on file for Medicaid probably would have received the NOI (sent by HMS which is the contractor for TX recovery) maybe in Feb or March 2015. There needed to be an initial response to the NOI aka "intent to file a claim" sent by family, heirs or estates atty. within a set period of time from when the letter was sent after your son's death. If father did son's Medicaid renewals, then it likely went to him at his address. It's a multi page questionnaire. If probate is being done, then within the probate process, HMS should have been sent a notification of probate being opened, its PC#, court info, etc so that it can file a class 7 claim against the estate. There also should be a Notice to Creditors placed in a paper also.

It sounds like maybe you were not involved in the probate process as his dad took the lead on your son's care & finances. If so, I'd suggest you contact probate court to get a download of the docket and filings to see just what's what.
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You know my second thought on all this is that the trust established for your son from the lawsuit settlement was not actually a part of his estate. If he had an accident and there was a very large financial settlement, could the 600K (more?) actually been placed into a special needs trust for your son? In order for him to qualify for Medicaid, he would need to be at-need financially which means he is poor. If the $$$ was put into a SNT to make him eligible for Medicaid, I'd bet that it would need to be Medicaid compliant SNT for him to get onto Medicaid. For a trust to be compliant it usually means the beneficiary of the trust is the state or the states Medicaid program. If say, the state paid 300K for his care but the trust has a balance of 500K upon his death, 300K is paid to Medicaid first & foremost and only afterward would the 200K left in the trust then become either an asset of his estate distributed in probate or as per the terms of the trust (the wording on dissolving the trust will determine just what happens). It sounds like the amount in the trust at 200K is way way less than what Medicaid paid for his care at 600K. The 200K is probably being held in a "special account", I'd bet, to make sure that there are no Class 1 - Class 6 claims against the estate as MERP is a Class 7 claim for TX probate. TX is a Level of Claim state for probate and paid by order of Class. This would be my guess as to what's happening.

Again get the docket and review to see just what's going on.
If the trust has only 200K and the costs of care are 600K, family is not responsible for the difference btw.
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"most of his adult life" but not all? At some point he went on Medicaid? Yet probate court ordered distribution? Take that court order to the bank. If they do not cooperate, get an attorney. It's very possible DADS made an error, either by missing the deadline or attempting to recover from an individual under age 55.
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