Losing someone you love is never easy. This can be especially true when you add a nursing home bills, doctor bills, and Medicaid Estate recovery to the equation. After focusing on taking care of your family, mourning, and letting the dust settle after the funeral, you may start asking “what do we do with their stuff? Who has to pay these bills?” These two questions are inextricably linked.
The probate process is similar to bankruptcy. Florida probate requires the Personal Representative to marshal the assets of the deceased person, then pay the creditors who filed claims in the estate, and ultimately distribute any of the remaining property to the beneficiaries.
Florida Medicaid Estate Recovery
Probate is especially tricky when the person who passed away was receiving Medicaid benefits. Florida uses a process called Estate Recovery to seek repayment of any benefits paid as Medicaid benefits. This often is in the form of a statement of claim in the estate filed by the Florida Agency for Health Care Administration (AHCA). If the only asset qualifies as homestead, or there are no non-exempt assets the analysis can end there.
Problems arise when there are non-exempt assets. These are usually bank accounts, non-homestead property, stocks and bonds that may have been assigned (but the title not changed at the custodial institution). Clients often ask “Do I really have to pay Medicaid back?” The answer depends on some important time limits in the Florida Probate Code.
Reasonably ascertainable creditors (like AHCA) must be served a notice to creditors and any petitions asserting that assets are exempt from those creditors’ claims. These creditors have 30 days to file a statement of claim in the case. As to all the creditors that may be lurking, in a formal administration the personal representative is also required to publish the notice to creditors. If a creditor was not reasonably ascertainable, they must file a claim within 90 days of first publication of the notice to creditors.
Whether a creditor is reasonably ascertainable or not, all statements of claim must be filed within 2 years of the date of death.
In Florida when someone over 55 passes away, their estate is required to give notice to the Agency For Health Care Administration along with a copy of their death certificate. This is specifically so the agency can pursue estate recovery.
Is it Possible to Avoid Repaying Medicaid Benefits?
If you’ve been reading closely, I’m sure you may have spotted the clues. Although this is not a Poirot novel, you have all the clues you need to solve the mystery.
In the hundreds of estates we have handled, AHCA always files their claim. It is very rare for them to miss the deadline when served. This means one of the first questions a good probate attorney will ask is: “did they pass at home, in the hospital, or in a nursing home?” The answer to this question gives a plethora of useful information.
The answer to that question can help us determine the potential creditors. Is there likely going to be estate recovery? If they passed in a hospital there could be tens, if not hundreds, of thousands of dollars in medical bills. All of these creditors are subject to the limitations explained above. If the client is aware of high medical bills, or their loved one was receiving Medicaid for years prior to their passing, it may make sense to wait out the creditors.
If no one petitions for probate, then there is nowhere for creditors to file their claims. Creditors cannot generally file a naked statement of claim unrelated to an existing probate case. In cases where we anticipate estate recovery, I often advise clients to set a reminder on their calendar to call me about 2 weeks prior to the two year anniversary of the date of death so we can start drafting the probate documents. We can then file them the day after that anniversary.
Once the probate is filed at that point, no claims of creditors will be considered timely filed. If a claim is filed, which sometimes happens, we can object to the claim as untimely and move to strike the claim.
Not Just Good Legal Advice, Good Counsel.
We pride ourselves on not only being skilled probate attorneys, but providing good counsel to our clients. Sometimes the answer is not “Write me the check so I can start earning it by working on your case.” The good advice can sometimes be “Don’t do anything yet. Wait the two years so we can tell the creditors they’re out of luck.”
Waiting out the two years can save tens of thousands of dollars in many cases. The current average monthly cost of nursing care is $10,438. If Medicaid is paying that bill for your loved one, the repayment can reach into the hundreds of thousands of dollars after a year or two.
Every case is unique, and if you want to discuss your options in dealing with a loved one’s estate if they were receiving medicaid, call or email us for a free consultation. It is important to note that we’re not your attorney unless you’ve signed a representation agreement and paid our fee, this article does not create an attorney-client relationship.