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A lien may still be filed against the property, but it will only be against the life estate interest. Such lien will prevent the transfer of the life estate during the existence of the lien. However, since the life estate terminates automatically at the death of the individual holding the life estate, the lien would have no interest to attach to at that time. That does not mean that the state will be unable to recoup the Medicaid benefits paid to the recipient in the nursing home, IF the state allows for such recoupment against life estates. This varies from state to state, so you will need to find out the rule in your state about this.
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Need more information. Were you a caregiver for a period of two years in the home prior to nursing home being necessary? When was thenlifebestate created and why?
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John - what are the reasons for doing the life estate? & what type?

What type of liens are you concerned about.....a lien from Medicaid?...a lien from debts that the remaindermen on the LE have?
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John, you should see an elder law attorney it will relieve your mind. Most will do a free half hour telephone consultation.
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Like Glad said, you need to speak with an experienced attorney in your state. Now there are some things you should do in advance of the meeting which will make it more productive and reduce costs.

Get all legal on the house. This means everything that has been filed on the property and recorded @ the courthouse. Most counties have documents available on-line for a very cheap download. Like $ 8.00 for a deed of trust or $ 3.00 for a covenant. Get it all, make copies to give to attorney. Usually you need the parcel # to ID the property in the courthouse system; parcel # will be on the annual tax assessor / collector bill. Also you want to get together a "face sheet" on both uncle & aunt with all their basic details, like any marriages, children from any of the marriages (even if deceased) & any wills they may have done before LE.
And a copy of the LE with an new sheet on the current address of those named within (like aunt's NH address, nephew's contact info). Give to attorney.

Medicaid is required to a recovery or recoup of any expenses the Medicaid paid for an elder's care & paid by Medicaid. This is MERP - Medicaid Estate Recovery Program. MERP is very much interdependent on your state laws, especially for probate in how it is done. Whether or not an old LE done in 1997 will make the property excluded from MERP will depend on Mass state laws. Hopefully since the LE transfers out of probate, no MERP issues, but you need clear legal on this.

All states now have to have MERP set up in order to get the federal funding aspect of Medicaid. Under Medicaid, the elder's homestead is an exempt asset by & large in most states. BUT once they die the home goes from an exempt asset to a non-exempt asset and subject to MERP. Whether or not an old 1997 LE avoids MERP will depend on state law. If it's not exempt, all is not lost. MERP has many exemptions, exclusions and hardships. You need to clearly find out which of these will apply for Brother or other family & they will need to respond to any MERP inquiry to establish & document the exemptions, exclusions or hardship that they fit the criteria for. You do this so that you all can get the MERP claim or lien "lifted" from the property (this is be a document that need to be filed too).

Another thing to speak about with attny is any LE issues with remainderman. You need to ask the about what happens if uncle predeceases aunt; what happens if nephew as remainderman should have his (or wife) any liens that can be attached to the property.

You know folks often do an LE and think that all is solved only to find out that the LE goes awry. After Hurricane Katrina I did some helping with paperwork filing for SBA, Road Home & MDA funding. The LE's had all sorts of problems in that often the senior had it such that all were listed on the LE, so all their kids were the remainderman and if they wanted to could essentially take their share of insurance proceeds (and did) or go against mom to rebuild and force a sale & keep their share. Forget any kumbaya moment. Or 1 LE remainderman had all sorts of liens & judgements that could go on the LE. Not pretty. You just want to find out any surprises that could be out there.

Get your documents together and get legal. This site has a drop down list of elder law attorneys by state. Go to the Money & Legal bar (far right). Good luck.
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Thank you all for your answers. I have an appt. 10/21/2014 with an elder estate planning attorney and will bring the aforementioned documents with me. I know years ago they did pass a recovery law here in mass. , but I've read on some mass. health discussion boards that it was dropped. I guess I'll find out tomorrow. Thanks All.
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Yes it will. But there is a 5 year look back for medicaid .
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This was a life estate drawn up between two siblings both living on the same property in 1997. Sister went into nursing home May 2014. Brother still living on property. Both have financial interests in the property. Sister has no will and is a widow. Property is in Mass. The brother remaining on the property has also drawn up a life estate with nephew over five years ago hoping to keep property from liens.
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