I lived in GMO's house while she was in Medicaid NH, because parents wanted someone to live there, and I was in college and needed housing. So it was beneficial to have me living there, both for me and GMO. I paid utilities, did minor maintenance, kept yard up & cleared snow. However when she died it didn't take long AT ALL before the county came for the house, demanded lead-abatement, wiring all updated by Master Electrician, new sheetrock installed in bedrooms, an old shed removed & some dead trees removed. All that had to be done at my parent's expense to get it up to code so it could be sold (parents simply did all that without any question, not sure if they could have fought it). The kicker is, the county caseworker somehow assigned a real estate agent to sell it and that agent was related to the county social worker.....and the buyer was yet another relative. It sold for below market value despite all the code improvements. Unfortunately i couldnt afford to buy it. So in essence GMO's house paid for her nursing home care but what an incredible inside deal for the county worker's family...I hope this doesn't happen elsewhere but it happened to us (too long ago to do anything about it now).
An elder law or at least estate planning consultation with someone who knows your state's Medicaid regs would be optimal to be sure of your position and avoid any mistakes that could cost you a great deal later on!!
Thanks Igloo, that's good to know. I do wonder when all these recoveries occur. I don't know of any in my circle of friends or family. I've never talked to anyone it happened to and I've never read about it happening to anyone personally. Do people report it here? I've only been on these boards since summer of this year, so maybe it was posted before then. I'll keep my eyes open.
Sunny girl - well If MERP is bring done by the states, then I can see how the Dept of health & human services or the Dept of aging Services isn't at all staffed to do MERP. The recovery action rates were low 2006 - 2010. But there has been a sea change for MERP last couple of years.
MERP is now being outsourced by states. 2 main contractors - HMS & PCG - which approach it more like debt collectors so very proactive, everything strict timeframes and get a % of the recovery. Anywhere from 12% to 18% of the recovery; and they can add interest to the amount too.. Depending on the state contract, recovery % plus fees plus interest makes it totally worthwhile recovery action. HMS merp has a dz states and counting & they have another older seperate division that does compliance for CMS. I think the CMS contract division does the documentation for Stark law cases, so they are very sophisticated for data collection.
What seems to be happening is merp is doing claim or lien by default or shifting compliance to title companies. In default scenario, Family is still bereaving with death, gets the MERP intent to file letter, doesn't understand it OR notice goes to a family member that is not the one to deal with it, & whichever the case they don't respond with required documentation in whatever set timeframe so claim or lien gets done. Ability to place by default as no response by heirs. Then when heirs go to sell the house, the buyer needs title insurance as they are getting a mortgage and they can't sell the house as cloud on the title due to MERP claim or lien; so no titke insurance = no sale. The whole title insurance aspect of this is in an excellent article in Stargazer. Google stargazer MERP Texas for it. Family is toast on ever selling the house till MERP settled, which means proceeds go to settle MERP.
Ditto if family ever needs to use property for collateral, they can't show ownership due to MERP cloud on title. Perhaps family does a quit claim on property so they think no worries. But banks now are skittish on QCDs and want clean title on property, and you can't get due to MERP claim or lien.
Or family goes to transfer as per will, but probate judge cannot do without a MERP release of claim or lien document. it's an impasse.
MERP was put into law based on what was happening 2000-2005. Real estate was all a go-go then, totally pieces of crap property worth huge sums. Folks making 50k income buying 500K homes. Moms old house could easily be sold for enough $$$ that Medicaid MERP could be repaid with $$ left over for family. Totally different situation now.
How to best deal, well imho there isn't a set way as so much depends on your states probate laws, your ability to pay on whatever on the house for possibly years, house value, need to sell & the medicaid tally. To me the key is if family can do exemptions / exclusions / hardships with documentation. There is a great blog on merp & hms by randy Drewitt that you can google.
If you need to stay in the house, I would follow through and do what you need to do to stay there.
I read an article awhile back by an attorney on Medicaid Asset Recovery online and I was surprised at what her research revealed. She said that many states are not equipped to litigate and go after all these properties that they may be entitled to go after. Often they don't do it, due to lack of resources and the time involved in legal battles, especially, if the family member has a good defense. I haven't said much about this article, since most places, including here, the popular and standard answers are that Medicaid asset recovery is a guarantee, but according to this attorney's article, it's not that way that often. So, I would realize the law, but take measures to protect your interests. A consult with a local attorney would help give you more guidance. Good luck.
Yes you can. But you need to clearly do a long view as to: 1. If mom can private pay for her NH for the rest of her life, then no worries. But if she will need Medicaid, house becomes a non exempt asset for Medicaid once she dies & subject to MERP. How probable is it that you will have a successful MERP exemption, exclusion or hardship? 2. Your ability to pay for everything on the house for the rest of moms lifetime and then through any probate & MERP action after mom dies. If the house is modest & no mortgage and remains with all of moms tax exemptions, it could be affordable. 2. Your ability to do whatever to provide documentation required by MERP to the state as to your bring a caregiver that enabled mom to stay in her home for 2 years (in most states) and thus avoid Medicaid NH costs fir those 2 years.
Where the problems often arise is from: There simply isn't the $ to pay for the house. Tally up the last 2 years taxes, insurance, utilities, etc and see if you can pay all plus an emergency fund. Or you have the funds to pay for house as you work BUT since you work cannot be a full time caregiver for mom. So you don't qualify for the caregiver exemption from MERP so the state places a claim or lien on the property so you can never own it till the lien is paid. Another issue is that you can't get moms md to write the letter of caregiving for you, doc is reticent as its "legal"; kinda like many docs won't do letters for guardianship hearings. If you need a caregiver letter, you really need to do this ASAP when her doc still has a relationship of care for mom. You don't want to have to try to be getting this letter 4 - 5 years from now. Good luck in all this.
If Mom's NH is being paid/subsidized by Medicaid, then the state can recover what they spent via the sale of the house after she dies. There are some exceptions, such as for relatives who lived in the house taking care of the Medicaid recipient and postpone the NH placement for 2 years by doing so.
8 Answers
Helpful Newest
First Oldest
First
ADVERTISEMENT
MERP is now being outsourced by states. 2 main contractors - HMS & PCG - which approach it more like debt collectors so very proactive, everything strict timeframes and get a % of the recovery. Anywhere from 12% to 18% of the recovery; and they can add interest to the amount too.. Depending on the state contract, recovery % plus fees plus interest makes it totally worthwhile recovery action. HMS merp has a dz states and counting & they have another older seperate division that does compliance for CMS. I think the CMS contract division does the documentation for Stark law cases, so they are very sophisticated for data collection.
What seems to be happening is merp is doing claim or lien by default or shifting compliance to title companies. In default scenario, Family is still bereaving with death, gets the MERP intent to file letter, doesn't understand it OR notice goes to a family member that is not the one to deal with it, & whichever the case they don't respond with required documentation in whatever set timeframe so claim or lien gets done. Ability to place by default as no response by heirs. Then when heirs go to sell the house, the buyer needs title insurance as they are getting a mortgage and they can't sell the house as cloud on the title due to MERP claim or lien; so no titke insurance = no sale. The whole title insurance aspect of this is in an excellent article in Stargazer. Google stargazer MERP Texas for it. Family is toast on ever selling the house till MERP settled, which means proceeds go to settle MERP.
Ditto if family ever needs to use property for collateral, they can't show ownership due to MERP cloud on title. Perhaps family does a quit claim on property so they think no worries. But banks now are skittish on QCDs and want clean title on property, and you can't get due to MERP claim or lien.
Or family goes to transfer as per will, but probate judge cannot do without a MERP release of claim or lien document. it's an impasse.
MERP was put into law based on what was happening 2000-2005. Real estate was all a go-go then, totally pieces of crap property worth huge sums. Folks making 50k income buying 500K homes. Moms old house could easily be sold for enough $$$ that Medicaid MERP could be repaid with $$ left over for family. Totally different situation now.
How to best deal, well imho there isn't a set way as so much depends on your states probate laws, your ability to pay on whatever on the house for possibly years, house value, need to sell & the medicaid tally. To me the key is if family can do exemptions / exclusions / hardships with documentation. There is a great blog on merp & hms by randy Drewitt that you can google.
I read an article awhile back by an attorney on Medicaid Asset Recovery online and I was surprised at what her research revealed. She said that many states are not equipped to litigate and go after all these properties that they may be entitled to go after. Often they don't do it, due to lack of resources and the time involved in legal battles, especially, if the family member has a good defense. I haven't said much about this article, since most places, including here, the popular and standard answers are that Medicaid asset recovery is a guarantee, but according to this attorney's article, it's not that way that often. So, I would realize the law, but take measures to protect your interests. A consult with a local attorney would help give you more guidance. Good luck.
1. If mom can private pay for her NH for the rest of her life, then no worries. But if she will need Medicaid, house becomes a non exempt asset for Medicaid once she dies & subject to MERP. How probable is it that you will have a successful MERP exemption, exclusion or hardship?
2. Your ability to pay for everything on the house for the rest of moms lifetime and then through any probate & MERP action after mom dies. If the house is modest & no mortgage and remains with all of moms tax exemptions, it could be affordable.
2. Your ability to do whatever to provide documentation required by MERP to the state as to your bring a caregiver that enabled mom to stay in her home for 2 years (in most states) and thus avoid Medicaid NH costs fir those 2 years.
Where the problems often arise is from:
There simply isn't the $ to pay for the house. Tally up the last 2 years taxes, insurance, utilities, etc and see if you can pay all plus an emergency fund. Or you have the funds to pay for house as you work BUT since you work cannot be a full time caregiver for mom. So you don't qualify for the caregiver exemption from MERP so the state places a claim or lien on the property so you can never own it till the lien is paid. Another issue is that you can't get moms md to write the letter of caregiving for you, doc is reticent as its "legal"; kinda like many docs won't do letters for guardianship hearings. If you need a caregiver letter, you really need to do this ASAP when her doc still has a relationship of care for mom. You don't want to have to try to be getting this letter 4 - 5 years from now. Good luck in all this.
If Mom's NH is being paid/subsidized by Medicaid, then the state can recover what they spent via the sale of the house after she dies. There are some exceptions, such as for relatives who lived in the house taking care of the Medicaid recipient and postpone the NH placement for 2 years by doing so.