By Robert C. Gerhard, III, Certified Elder Law Attorney
Most of the money paid to Pennsylvania’s Medicaid Estate Recovery Program is from the sale of the deceased recipient’s home. A number of exceptions can apply to avoid estate recovery, but what can you expect, and if there is no way to avoid estate recovery, what happens next?
Estate Recovery Contacts the Next of Kin. When a recipient of Medical Assistance (Medicaid) long-term care benefits dies in Pennsylvania, the next of kin will be contacted by the Estate Recovery Program of Pennsylvania’s Department of Human Services. Often the person contacted is the person who helped their family member apply for Medicaid long-term care benefits.
Ascertain if an Exception Applies. If an exception applies, estate recovery can be waived or postponed. There is no estate recovery during the lifetime of the surviving spouse. Homes can also be protected for disabled children, a caregiver child, or for certain siblings who have an equity interest in the home and lived there for at least one year. Also, there is no estate recovery if the home is not a probate asset, say if it was jointly owned with right of survivorship or title was held in a life estate deed.
Contact a Lawyer before Signing on as Executor. A lawyer can let you know what to expect if the estate is insolvent. You need to pay creditors in the proper order, or you can be personally liable for estate assets that are paid to creditors out of priority. Estate administration expenses are paid before payments towards an estate recovery claim, including a reasonable fee for the executor. Lawyer fees are also considered estate administration expenses, paid ahead of the estate recovery claim from estate assets.
Executor Contacts the Estate Recovery Program: If an executor is appointed by the Register of Wills, the estate’s executor is legally responsible for contacting the Pennsylvania Estate Recovery Program to request a statement of claim. The estate recovery claim is normally sent to the Executor within 45 days of the executor’s request. If the Estate Recovery Program fails to respond to the request for a statement of claim 45 days, their claim may be forfeited.
If No Executor is Appointed. If no one in the family wants to serve as executor, the Commonwealth of Pennsylvania’s Estate Recovery Program has a list of attorneys willing to do so. The state can seek to have a lawyer administer the estate, but they prefer to work with the deceased Medicaid recipient’s family where possible.
Sell the House In A Timely Fashion: When no exception to estate recovery applies, the executor is responsible for selling the home and paying the claim within a reasonable timeframe. If the executor does not sell the real estate in a reasonable period of time, the Commonwealth of Pennsylvania can file paperwork with the court to remove and replace the executor, or administratively assess liability.
Provide Updates as Necessary: It can take time to settle an estate. If there is some unexpected delay, the executor should provide periodic updates to the Estate Recovery Program. If there is an extended time with no communication, the estate recovery claims investigator will contact the law firm representing the executor. The estate recovery claim does not accrue interest.
Provide an Accounting and Proposed Payment. If the estate recovery claim is not paid in full, the executor must show why. This explanation takes the form of an written accounting of what happened to the estate assets, either formal or informal. Usually the accounting is informal, setting forth what assets were in the estate, what bills were paid, and what money is left over to pay creditors, including the estate recovery claim. Your lawyer can make sure the Estate Recovery Program agrees with the payment calculation before you send it.
Payment is Made. When payment is made, the Estate Recovery Program will respond with a letter acknowledging the payment and confirming that they agree that payment has been made to the extent of the known estate assets and will close their file. They will say in their letter that if the executor learns about additional assets, the executor has a duty to contact the Estate Recovery Program again.
Learn More
The direct path to secure answers to your estate recovery questions is to contact our law office for a consultation. The legal fee for the consultation is a permissible estate administration expense, paid ahead of the estate recovery claim under Pennsylvania’s priority statue. For additional details, read our full blog article on the Pennsylvania Medicaid Estate Recovery Program.
—
Disclaimer: We recommend that you receive ongoing legal advice from an estate attorney before attempting to administer a trust or an estate. If you wish to secure our services to provide guidance and representation in connection with a trust or estate administration, please contact us.
