Medicaid lien - renting deceased grandma's home. Any advice?

G - I'm going to dial your ? back a bit.....so your grandmother died owning her home 100% but she spent her last 5 mos in a NH which was paid by medicaid; and your dad as grannies dpoa rented her house to you, that's it right?

Grannie died with an estate who has her home as an asset. This asset is subject to either a claim or lien against the estate by MERP. MERP is required to do an attempt to get the costs paid by Medicaid for grannies care reinbursed. How MERP is done will very much be interdependent on how MERP is done in your state (state employees do it or done by an outside contractor), what exemptions and exclusions and cost benefit analysis schedules are, and if probate is opened.

Your dad probably does not have the legal ability to guarantee selling the house to you. The house will have a claim or a lien on it that will have to be lifted to ever transfer legally to a new owner. House right now cannot be sold via a warranty deed & it is only by a WD that you can be secure in ownership. If dad tells you he will do a Quit Claim deed to you, well......he doesnt own the house, the estate owns it and if he is executor will need to go through some sort of probate process to be transferred. QCD only conveys what an individual thinks they own; which may or may not be full true & guaranteed ownership. Because of this, most banks will not do a mortgage or any equity lending on houses or land transferred by a QCD. Plus add in that the individual who owned the house is dead.The MERP claim or lien is still there on the property with interest which will keep you from ever owning it till that lien or claim is gone. The MERP claim or lein will come up in title search.

Now it is possible that you all can settle with MERP to get a release of its claim or lein. You need to find out what the MERP tally is and the value of the house as the basics in this process. If grannie was on a Medicaid program before she went into a NH, the costs paid by the state for that can be included in the MERP tally as well, so the final lein could be quite alot of $$$. NH medicaid reinbursement rates vary by state but average cost is $ 8,000.00 a month.

So:
- Did dad notify Medicaid that the house was rented & was the rental income properly used to either offset property cost or be paid towards grannies required copay or SOC ( share of cost ) to the NH? Your rent paid will also need to be included in the listing of estate assets for probate filing as well.

-Did grannie die with a valid will & is dad named executor?
If so, Has dad opened probate? If not, when does he plan to?
If no will, this is a a whole different sticky situation on dealing with the estate.

- Has dad or another family member received MERP's "letter of intent"? It will have the amount supposedly due to the state by the estate. If so, have they responded to its questionnairre? And have they filed any exclusions, exemptions or other interest in the property to MERP? The renting of the property is probably one of the ?'s in the packet from MERP.

- find the current tax assessor value of the property. Most places have tax assessor bills going out between now & december for a January due date. If value seems incorrect, then the executor probably should get a house inspection ($300/500) & an appraisal ($300/700) done as part of the probate process. if house has structural issues maybe an engineering report (1K) as well. these 3 need to be done by a registered, valid professional too. The value & comps done by a Realtor won't work to enter in probate (although these a terrific to have for an ideal of what house could sell for).

There are a whole lot of pieces that need to happen for you to legally own grannies house. I'd try to find out the answers to some of these before you get too into planning how your going to paint the house or in spending on any repairs.. States vary on length probate can run. Your living in the home during probate should not be an issue as an empty house can have its own problems.

There are a couple of folks on this site who deal with rental property & another is a Realtor who hopefully can provide details on how they've approached this.

Unless your Dad is an Elder Law attorney, I would contact Medicaid to get accurate information. Medicaid wants to get paid, and the price of the home will need to be at fair market value.

Do not do the land contract with Dad. Find out from MERP how much the lien is. Get a lawyer to help you with this, don't just wing it.

GSantiago, would it be possible for your Dad to pay off the Medicaid bill from his own pocket without touching the house? Since you grandmother was in the facility for just six month, maybe the total bill isn't that great unless Medicaid was used prior to her going into the facility. Depending on the total owed, maybe the bill can be paid and the lien be removed from the house. Thus the house would be free and clear [unless there was a mortgage]. Just a thought.

A lot depends on the State and their own rules for Medicaid.

No my dad isn't an attorney. It is what he understood from the lady that does the Medicaid billing at the nursing home. I am just worrying/wondering if I am going to be told to move suddenly bc Medicaid was to put the house up for sale!

G - grannies SS was her required copay to the NH under medicaid rules. Medicaid then pays the facility a room & board rate. Whatever that was tallied up to 28K. Which isn't very much money. If you or dad paid on costs on the home, some of this costs may be deductible from the 28K as well. Since you have been living in the house rent free so not all the costs paid can likely be deducted. In theory, you or dad should be able to pay the final costs due to MERP on this to be able to get the release needed to transfer the house in probate as its going to be a low amount of $.

What is the house worth? Like what's the tax assessor value? Some states have MERP such that there needs to be a recoverable minimum of 10k to meet the cost benefit analysis for MERP to be done if estate goes through probate. Ask the attorney what cost benefit schedule MERP uses for your state.

Are you the direct heir? It could be an issue if you are not the heir as it may need for the direct heir to be low income to qualify for this exemption. Your state Medicaid program should have a FAQ on what MERP is and how exemptions & exclusions are to be done. Google this before the atty visit.

Also try to find out what types of probate are required for your state. Full probate has set time frames & requirements, I'd say 2-5K to start. But some states allow for small estates affidavit which is less costly. And other states allow for a muniment of title which is under 1k and could possibly work if all grannie had was the house & no debt and you can get a MERP release to enter with the muniment to get the house transferred to the heir.

Good luck & let us know what comes out of the meetings.

Hi Everyone, THANK YOU. I am a bit overwhelmed with all the input. Here is what I know so far: My gma's Social Security paid for part of her stay at the nursing home ($1500mo.). Medicaid says the balance due is $28K...though there is a dispute for a few months due to her being in rehab for part of that time. The house value is roughly $60K. My dad spoke with Medicaid and they are sending us forms to file for a hardship, due to the fact that I am a single mother, on food stamps, just finising school, have no job, and have a 16 year old dependent. We signed a lease THROUGH the nursing home and filed with Medicaid, that was "suppose to" guarantee my ability to live here paying rent(ie 100% going toward Medicaid bill) for as long as I wanted. And said by nursing home, with an ability to land contract it, which 100% of that would go toward bill too). The house is totally paid off. I am getting really nervous. There are no job prospects, I am living in a home I don't know if I can ultimately settle in, and I have my daughter...so not to mention the emotional toll of first moving and then being told we have to leave. I still need to go through carefully what everyone said. I am a bit upset and it is hard to concentrate. I really appreciate all your knowledge and help.

Also, when Medicaid brought up about attorneys to my dad, he can't afford to do that. So, I don't believe he will be "opening probate." I believe he is the executor of the will....

If I decided to obtain a lawyer myself, what kind of lawyer should I be looking for? An Elder Care lawyer or something for probate? I am sorry, but I am very ill-informed about all this kind of thing. Thanks again

The follow up is: I set an appt with an attorney :) I feel like I don't know enough to even begin handling this. Thank you everyone for your help!!!!