I live in Virginia and my dad passed away on September 20, I am his executor. I have already filed his will, he did not own very much. What was left in his name, a mobile home and a Ford Ranger, was valued at $10,000 by the person who filed his will at the clerks office. He had a checking account, it has about $2,949 in it. He had added me with survivability so when he died his bank account automatically became mine.
Am I legally obligated to pay all of his bills? He owes ADT as well as a utility company he used for his cable and phone. I had been trying to cancel both those accounts since August 22 because he was in the nursing home and have just got them closed this past week. Do I have to pay for the past couple of months? He has one big bill, an unsecured USDA rural development loan. He is the only person listed on the loan. He got a grant years ago through the weatherization program. He got an unsecured loan to pay for what the grant did not cover. Do I have to pay that? It is about $5,000.
I have discovered he never filed a will for my stepmom when she died in 2015 and he never changed the title of his home to only his name. I am having a hard time getting the title changed to mine and my brother’s name. He had filed a gift deed in 2019 that we thought would give my brother and I the land and home. We have now discovered the home was not covered because it is a mobile home.
No one is living in the home, the electric company has been notified of Dad’s death and they have turned the power off. We are waiting to hear from the Medicaid Estate Recovery Service people to see if they are going to take it. The mobile home and his 1987 Ford Ranger are the only things he has that they can take I think. Does anyone have experience with this? Do they usually take everything?
He had a life insurance policy but it is much smaller than I thought. It only lists me as the beneficiary. Can Medicaid estate make a claim on that? Am I required to use every bit of it to pay his creditors?
Thank you for any advice you can give. I am lost and overwhelmed.
Second since there is now probate, see what your state says about this,
What happens before or after it is opened, all creditors are notified about the death. They have a certain amount of time to file a claim. If they don't file before before or by the deadline they are out of luck.
Wait for the letter from estate recovery to see what they say. If they take the home and car, then the other creditors will be out of luck, There would only be the checking account left, but since he was smart enough to have it set in a way that it transferred to you, it's your money.
If estate recovery decides not to, the other creditors can still seek payment, again as long as the claim is filed in time. If that is the case, the mobile home and/or car would need to be sold to satisfy the debts. If this happens, they will send proof of payment to you, which you then file with the court. Once all debts are paid and/or satisfied you can close the Estate. Be sure to file a final tax return if warranted.
Bank account was done POD or TOD to you, so it became yours & under your SS# upon his death. $ passed outside of probate to you, and things that pass outside of probate are NOT an asset of his Estate. That life insurance policy of his, IF done to have you as “beneficiary of”, it too passes to you outside of probate. You may even get issued with your SS# a 1099-R from insurance company. It’s not taxable income but ya do include it in your personal income taxes filing. The only way a life insurance policy belongs to the Estate if named to be “Estate of” as the beneficiary. I’ve been an Executor couple of times, that your Dad did these 2 things are really fortunate and the $ is all yours with no sharing required. Often though there is an understanding by the elder that the $ was to be used for funeral or other property expenses although you cannot hold the beneficiary to actually doing that.
On MERP hang with me on this as it is not at all straightforward: usually - in what I’m aware of - the State is not going to want to deal with any of the details on his truck or manufactured/mobile home (disconnect it and doing this with proper safety and sanitation to decouple the hulk from its moorings, get a 5th wheel or tow truck to remove it, clean it to make it sellable, etc). Plus dealing with these on land that is actually owned by others (this lil detail imo could be mucho importante should you want to get hardball). So what can happen in situations like this is it’s considered nonaccessible asset and outside of any cost benefit for recovery. The estate recovery program is run by your State (or an outside contractor) with federally required cost benefit analysis (CBA). Baseline seems to be 10K…. so unless assets significantly higher in achievable value, then asset considered to be a nonaccessible and case closed. Where used often is when asset is undivided interest ownership (like generational land with lots of owners, or mineral rights as also lots of owners over several counties) or asset not physically readily accessible (having to coordinate with landowners) or asset with issues (mortgage, delinquent taxes, rundown, other liens or claims on it). That a CBA component exists is usually downplayed. What MERP ideally would prefer is for the heirs / family to do whatever needed to turn assets of the Estate into $ which in turn is paid to the State. The correspondence often implies that someone has to do this. The letters can on a first reading lead you to believe that you owe the $ and must find a way to repay it; heirs or family or Executor have to spend time & pay cost$ to sell assets of an Estate at FMV. But realize if family / heirs not be inclined to do anything with now deceased elders assets, they do NOT have to. Executor could open probate and shift all this into probate court and their system of level of claims. LSS you do not have to repair window that is rotting or pay real property taxes on Ford Ranger or mobile home. You have huge additional sticky in that mobile home titled in both names so something has to be done legally for her Estate 1st then with his Estate to ever be able to have a clear title to sell. I have no idea on legal costs, but SWAG…. 7K plus maybe a year to get though her legal. I’d point all this out along with perhaps a new lower valuation done on the truck and mobile home (if it was done by Blue Book value and not of the actual vehicles) and estimated legal fees and that unfortunately Recovery not feasible.
Another thought, as landowner maybe look into how to legally make the MH abandoned. & get it hauled by someone for scrap.
I suggest you contact Medicaid Recovery*, Dads caseworker can give u the number. You explain to the caseworker that Dad has died and left a small estate. You may have to wait for a recovery letter and fill out the form before you can go from there. Your problem maybe how much the land is worth. If sizeable, may need to be sold to pay the lien Medicaid will place on it. You really cannot do much until you find out what is owed to Medicaid. You must do this right or Medicaid could come after you.
You really do not need a lawyer until you get that recovery letter if then. For me all Mom had was her house. Once on LTC Medicaid, I stopped paying her taxes. I was lucky, Mom had only been on Medicaid for 3 months. I sold the house and was able to pay back taxes, Medicaid and be reimbursed for my out of pocket. There was a small amount from the proceeds left which got split between 3 children.
I was told when Mom went on Medicaid her Will was voided. Medicaid by State Law has to recover what they can. Your Dads trailer and land was an exempt asset while he was alive, not so after his death. I am so sorry, but you may not be able to keep the trailer or the land. Unless you can prove you lived there and were his caregiver for at least two years. Or you are a disabled child who lived there. In both scenarios, you also will need to prove you can continue to pay taxes and bills because a lien will be put on the property. Medicaid is not a free ride.
*I had not heard from Medicaid 3 months after her death. I needed to know how much to ask for her house to be able to pay back Medicaid. Seems the letter had not gone out. I was told what was owed over the phone and the letter was sent a few days later.
Please do use your Dad's money for a trust and estate or probate attorney. This is going to get you your Tax EIN number and you open an account with that tox number. Then as you gather in all these assets whatever they are, and give them to the people who may be listed as POD (pay on death) beneficiaries, you will be keeping records as the probate attorney directs you. You will gather all monies that don't have POD on them (those that do already belong to the person designated and are not put in the estate account but given to those persons). That will constitute the entire estate. Then you will pay all bils. Were I you, yes, my first concern would be medicare.
If dad's estate doesn't come to enough money then you pay what he DOES have/DID have to Medicare and tell him there are no further assets. Then when other bills show up in the mail you mark them "decease; no estate".
As a for instance:
If say you have 30,000 total in your estate account after 6 mo to a year or gathering it all into the account.
Let us say Medicare has sent you a recovery notice of 45,000. You send the 30,000 with records of his proving that's all he has. All others get the "sorry out of money things".
Let us say Medicare sent you a recovery notice of 12,500. You pay that to them. Then you pay other bills until there is nothing. You pay your attorney FIRST as you manage the estate.
Your note to us makes me think you have perhaps not done this in the past. That's why I suggest an attorney and good record keeping.
You can handle this so that the attorney does ALL the work, MOST of the work, or only GUIDES you in the work. He will be paid accordingly.
I wish you a lot of good luck. All this stuff isn't a whole lot of fun and all states have different rules. In some, with a very small estate you don't have to file much of anything at all. But it is important to have a guide if you aren't savvy on this stuff, and most of us are not.
Good luck.
His Medicaid social worker said I would get paperwork from the Medicaid estate recovery office in the next few weeks. She said they might take the mobile home or the truck, it was up to the person assigned to his case. I’m hoping they will not take it but I expect they will take his truck. I just hope they do not take his home. His case worker said she did not know for sure about the life insurance but she thought because I was the beneficiary and not the estate they can’t take it. The person at the clerks office at the courthouse who filed the will said Medicaid can’t take that because it is not part of the estate, it was given directly to me. I was hoping to hear from others that had similar experiences. My understanding from talking to the caseworker is that is the only things they would do to come after money. Am I wrong? Should I be worried? Thank you again for your help.