I am going to try and keep this short. My stepmother was hit by a car end of August and killed. My sister is in charge of the estate. We sold the house and all liens were taken out. We received a letter from NJ Medicaid saying that we owe them money. No amount was stated just an exempt questionnaire. The remainder of the money is supposed to go to my Grandmother since she was put in an assisted living facility. We just need to know amount etc.... On the state form it says reasonable funeral and expenses related to estate. Is this mortgage, electric, and general upkeep of property? Has anyone dealt with this and have advice on how to move forward?
So long story short I’m assuming is Estate is in NJ probate system with a case # and has an EIN. House sold to outside person with title search & title insurance done, so that’s beyond fab as buyer should have no Estate Recovery issues. If there should be an issue then that’s the title company to deal with. There - based on what you posted - is $ left in a bank account with estate EIN. To me, in my not an attorney but have been Executor x 3 viewpoint, the next step is just what position does MERP have in standing for NJ probate as a debtor against the Estate.. And that is a question for a NJ probate attorney.
Has to this point Sissy been able to DIY the house sale and paying off debts and establishing the estate bank account ?
If so, awesome work on her part!
If not then the attorney for the estate needs to discuss with Sissy the position the estate will take as far as debts / claims against the estate and their “standing” (their priority) against a distribution to heirs as per the terms of the valid will.
Standing should have a established system for determining priority.
Merps “standing” should be set into NJ laws or administrative code. If probate was opened, usually debtors against an estate have to file a claim against the estate in a timely manner usually based on when the NOC (notice to creditors) was placed in local newspaper or other allowed publication. If creditors doesn't then the Executor if it’s an independent administration should have the latitude to determine whether to consider it or not based on your states laws. Like for example TX is a Level of Claim by Class for probate, each Level is certain distinctive items, like credit card debt is Class 8, MERP is Class 7. All claims in class 1-6 have higher standing to be paid before a distribution ($ paid to heirs) is done. But other states have it so all claims equal in standing but usually those who got filed earlier traditionally get paid first. Probate can become a forum for negotiations.
If Sissy or you or other family have had any estate related costs, you need to file a claim for them with documentation to the court. So you file any property taxes paid, insurance paid, itutlies, yard work, etc. Reaaly whatever is required or routine costs to keep the property safe, secure and not blighted. Sissy as the Surrogate, imo really needs to file any estate related costs, like the above stuff plus even like the receipts on xerox of documents sent to MERP and the certified mailing to MERP, on a regular basis to clearly show she is actively doing her court appointed duty.
If she paid a company or someone to have house emptied, cleaned & made market ready, that bill gets submitted by her as a Surrogate (§or Executor) as a legitimate cost to maintain Estate. If you all did it on your own, as dutiful stepkids, then it’s done for free and not a documentable expense / claim filed against the Estate.
That medicaid debt is not your debt or your families debt. No matter what Estate Recovery may try to insinuate.
Out of curiosity, was there a wrongful death action going on with auto insurance companies? Still out there or was settlement done? Was she hospitalized from the accident with MediCARE (MediCARE not Medicaid) paying for her hospitalization? Ask Sissy. CMS (Centers for MediCARE and Medicaid) sends out detailed billing / payment statements very 3 - 5 weeks to whatever was mom’s last address. If MediCARE paid for stuff it will be in the CMS statements. If auto lawsuit involved, there’s gonna be another issue to deal with. Ask Sissy and let us know.
NOI in theory needs to be filled out and submitted within whatever is the specific timeframe indicated on the questionnaire as the info you put in is used to determine what action state will take for Estate Recovery (MERP). If not then state takes the position that the amount owed is accurate and there are no exemptions or exclusions or other factors (like probate is to be or is opened) for the state to place a claim or a lien. It goes into lien or claim by default (kinda along the lines of how debt collections does this with unsecured debt like credit cards) if NOI is not responded to, Usually NOI goes out within 2-4 months of death. JoAnn’s address clusterF in getting the mailings from the state in a timely manner seems to be a constant problem for MERP no matter what state it is.....
The issue often is that family / heirs may not know what costs of the estate may be like; or what other bills are lurking (like parent didn’t pay property taxes); or if heirs can file for exemptions or exclusions to Medicaid supposed bill, like your states administrative code allows for all taxes, insurance and other reasonable property costs paid on vacant property while elder was alive & in a NH to be deducted from the Medicaid tally; or if assets of the estate are accurate in value; and if assets can even have a claim or lien placed, like if items are in a Lady Bird Deed or Testamentary trust they may or may not be attachable by MERP. I’m of the opinion that the NOI should be responded to by date required and all documentation attached and sent certified mail to MERP and if you don’t get a release of claim / lien then you open probate.
So the NOI, does to have a “respond by” date? Has date passed?
Did probate get opened?
So the house sale all posted in probate and distribution signed off by probate judge?
If not, just how did your Sister sell the property?
Was house sold via a Realtor or other at true arms length sale, and sold via a Warranty Deed and a title company involved? Or was this a QCD - Quit Claim Deed filed to transfer house?
Was house sold to friend, family or neighbor?
The “liens” paid, was this at the Act of Sale, so were secured liens - like a mortgage or heloc - so had to be paid to get release to enable a clean title to the buyer?; or were liens paid after Act of Sale?; were any of the liens $ paid to family?
It sounds like $ was left after liens paid, where is this $ now? Like in a bank account that is an Estate Of checking account with its own IRS EIN # or is the $ in Sissy’s bank account under her SS#?
The answers to the above ?s will be of interest for MERP and how much of an issue for your Sister and your family.
Every state’s Medicaid program involving Medicaid services paid for those over age 55, requires states to attempt a recovery action. Just how done imho interdependent on your states laws and administrative code for property, probate and Medicaid. Some states do MERP / Estate as an in-house department of Medicaid. Other states have outside contractors who do this and they are paid an administrative fee plus a % of the recovery. About 1/3+ of the states have outside contractors.
Anytime Medicaid is involved, you have to pay them back if there is an estate. My Mom was in LTC so only had a house. I requested a letter from Moms Medicaid caseworker when she passed with the amount owed so I knew how to price the house. Was able to obtain that but, I never received the letter they send for info to put the lean on the house. So I made a call to Trenton. After a few transferred calls I finally got the correct person. Seems my paperwork went to the NH and never forwarded to me. I was sent the letter.
The woman I contacted was Phyllis in Estate Recovery. Her phone number is 609-588-3016. Explain to her the house has been sold and all liens paid. No one was aware of Medicaid till now. She was very helpful.