Mom sadly passed away in January of this year. One sibling is disabled and lives in mom’s house. We recently received a letter that the house qualifies for exemption from MERP due to my sister living at the property for the past couple of years and due to her disability. Mom did leave a will stating that the house would be sold and proceeds be split among 8 siblings. Before Medicaid got involved we had talked to an attorney and he had suggested we do Affidavits of Heirship to honor mom's wishes and not go through Probate. We are all ok with sibling staying at house, but everyone wants to be part owner of the property. Is this what needs to be done? Also what happens when this sibling passes away? Does property go to MERP? Thank you in advance for any suggestions/advice.
I'm sorry for the loss of your mother.
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
? 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.
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.
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.