I live in Pennsylvania. My husband died in April 2017 and had been in a nursing home before his death and qualified for Medicaid, having submitted complete financial picture of both of us. I am 13 years younger than him, he was 87. We own a condominium worth $150,000, but the mortgage is still over $109,000.00. My question is this: will I be able to sell the condo and move to a less expensive home without losing what we have invested in the condo?
Like for example if your state does probate by Level of Claim by Class, then just where claims are in line depends on class. Like for TX probate, it's done by level of claim by class. Funeral costs, probate costs, Executor costs (like for property), secured creditors (mortgage co) all are in Class 1 - 3 & priority for distribution of assets from the estate. MERP (unsecured) is Class 7 & paid only after 1- 6. Credit cards (also unsecured) come in a Class 8. If you have costs that could be entered as a claim, you need to do it and with documentation. You need to speak with your atty (or perhaps staff atty at probate court) as to just how to do this.
There are all sorts of nuances in estate recovery. It's not simple. Strategy for your situation is going to be different than for another. It may be that the probate attorney is somewhat clueless as to medicaid & its estate recovery program/system and the various exemptions, exclusions and cost-benefit requirements of MERP. Perhaps probate atty. more used to dealing with estates who actually have a$$et$ and make fees from doing distribution$ & $ettlements or drawing up new legal (like the will states trusts or an LLC created from assets). An estate with a substantial mortgage plus medicaid tally probably means NO real $$ within an estate...
There is no reason why you cannot ask or email the atty and say "estate will have MERP (or whatever it is called in your state) & are you familiar & experienced" with it. And get it in writing from atty that they are.
We don't have elder law attorneys in our community. The Probate attorney will file because of the debt owed the state.
Hopefully an attorney can help you with the timing of everything. When the condo sales, it can make a difference depending upon where you are in settling everything. At least Medicaid does not take priority over the mortgage, so you will not have to walk away with two giant unpaid debts. The mortgage will be paid off, and Medicaid will be waiting in line. I would be concerned about whether or not I must pay 50% of any equity share to Medicaid at the time of sale. In our state it's at the time of sale, and cs hangs onto other half of equity. Maybe between the attorney and MERP if it's evident enough that you really need the money I hope you're allowed to keep it for your own support.
I think it is a great idea to downsize into something more affordable. It is good you are planning ahead.