We received a letter that Mom's house qualifies for exemption from MERP due to my disabled sister living there. What’s the next step?

Also another sticky may be if your disabled sibling can afford the house. Whether it’s her paying her 1/8th share or 100% of the house (as the other 7 siblings will not pay on a property they do not own or live in), there are property costs that must be paid. Property taxes once assessor gets info from state that mom is dead will place property in a higher tax bracket. If it takes months or years to get through MERP & perhaps probate to actually get property transferred and recorded into new owner (s) names, that means higher taxes that must be paid. A title that is has 8 owners names is going to be crazy for taxes as only those who have house as their primary residence can get tax breaks to qualify for lower property taxes.

8 owners is just unwieldy. You may want to look at creating an real estate LLC assuming you get through MERP, etc and have disabled sis as the registered agent with a slightly higher % ownership and/or paid an agent fee.

At least your mom left a will. Otherwise she’d be considered to have died intestate and that usually means that all assets escheat to the state till it’s established who legally are heirs. Like via a Lineal Heirship.

Yeah complicated & then some...... all heirs matter to Estate Recovery not just 1 out of 8. Here’s my not an atty understanding of how it tends to work.... state will have a system as to how MERP is done. If your state is one using an outside contractor, those tend to follow a very tight sequence of correspondence & actions which very much are similar to how debt collectors run (as the OC get a % of recovery and things have a set # of days in which to respond or debt is considered valid). If MERP is done by state workers it tends to mimic how your state programs run, if state efficient then MERP efficient but if state is disfunctional management then ditto for MERP. Add then factor into this that your state laws and administrative code will be very important as some states are very pro-property rights so the placement of a Medicaid lien cannot easily be done / or not allowed at all as Medicaid is unsecured debt & your state does not allow for unsecured debt to be place on a homestead, SO instead it has to be a claim against the Estate. Which if you open probate then everybody has to abide by probate court system for assets and debts (claims). Unless your really savvy on legal or lucky in dealing with MERP imo you will need a probate atty who understands MERP at some point cause you will open probate.

But back to your other ?, There are all sorts of exemptions and exclusions to Estate Recovery as well as federal guidelines on cost benefit/ cost effectiveness of recovery. They all come into play after death as the house which was an exempt asset of your mom’s now is a nonexempt asset of her estate. BUT a lot of the information and documentation needed for the exemption and exclusions are from when mom was alive AS WELL AS since death. Like the property costs paid by family on mom’s house as some states allow for some costs paid on property to be an exclusion to the MERP tally.

If there are other heirs besides your disabled sister who could qualify for an exemption then they need to get their submission in. I’d suggest you asap get the NOI (notice of intent) that was sent to whomever was the point person for mom for Medicaid to see what the exemption / challenge submission date is. There should be a set date by which to do this. There’s an exemption for low income heir and I’d bet it isn’t nearly used as much as it could be cause if the elder was really old their kids themselves may be retired and be limited low enough income to qualify or if the elder left their estate to a grandchild they too may be low income. You will have to document why low income though and get it through MERP.

My point is tendency is to think about MERP exemptions as all about caregiver exemption but there are others.

The value of the property plays into this too. To me if house is low value or very high value (closer to the Medicaid average limit of 550k) challenging MERP either by exemption/exclusions documentation or by opening probate can work in heirs favor. But someone in the family has to have the time, $ and inclination to be all Pitt Bullie on the house and all legal surrounding it. If your family - as you know them best- are not apt to work together or are themselves at need so cannot pay a penny if need be, it may be just too much for you to really want to do.

Thanks igloo572. Would we still have to go through Probate? Sister did submit exemption documents. So other disabled siblings could submit for exemption? Would property documents have to be changed? So complicated. Thanks again!

Guest has the catch22 in all this..... only your disabled sister has qualified for an exemption. So her share of the property is exempt. In order for her to get the entire house the other 7 probably need to walk away from their 1/8th. Now how to do that will require an atty & asap. It is not so much just an elder law problem but it’s a probate and property law problem as well.

? for you? Did your sister or someone else apply to MERP for the disabled heir exemption OR was it done by the state as she’s already in states system for disability, SSDi, etc? If it’s the latter, you might want to go onto your states MERP website to see what other exemptions or exclusions are listed and IF any of the 7 other heirs qualify for any exemptions and can get the documented to establish the exemption.

Thank you SnoopyLove.
Guestshopadmin, thanks for your advice. We do have an appt with an attorney. Just hoping someone else has gone through something similar and would share their experience before we see attorney

Talk to a lawyer that is experienced in Medicaid. The ONLY person that qualifies for the exemption from MERP is your disabled sister, so if ALL of you want to have your names on the property, there will only be a tiny amount of the property that is exempt. The exemption for the disabled sibling will depend on whether they have Medicaid, etc. SO PLEASE GET A LAWYER INVOLVED NOW! MERP has a limited window of time to respond.

Bumping this up for people more experienced in this but my first thought is you need a Medicaid-savvy eldercare lawyer.

I'm sorry for the loss of your mother.