My brother died recently, in his own home, at age 67; Medicare covered the hospice services he had at the end. He also had years of in-home care covered by a Medicaid-funded community program designed to keep frail recipients at home rather than in LTC facilities. (Those years also included several hospitalizations followed by skilled nursing rehab stays.)
He died without a will. As his only next of kin, I am what New Mexico calls a "personal representative" (like an executor) for the estate.
I just received the expected MERP request for a list of his assets. (AlvaDeer's concise description: "Upon death, if there were assets that could not be tapped during life, those are taken to put back some of what the taxpayers put out for care.")
Just 2 main assets: His condo on which he owed several years of back property taxes, and a credit-union account containing a few thousand $$ he was saving to pay the property taxes. His monthly condo HOA dues are also auto-paid from the CU account.
Head spinning. What's my best resource for questions like the following, (probate, real-estate, or elder-law specialists?):
Do I pay the overdue property taxes from the CU account before I list it as an asset for MERP? Similar question about the monthly HOA dues, which will continue to deplete the CU account until I can sell the condo.
Who appraises the condo's value, and is that appraisal done before any home-maintenance repairs?
Thanks.
If your brother has been delinquent for 2 or more property tax cycles, it will have gone up for tax sale. These tend to happen once a year & notices go up at courthouse and in the paper 2-3 times ahead of the sale. Sale could be all public in person at the courthouse or via on-line.
Now just going up on tax sale does not mean someone else owns it.
It means whomever put up the $ (which the County holds) owed & was the highest bid for that past year taxes is able to hold a tax lien or certificate on the property. Each year tgat property is delinquent, sequence happens again. Then after 3-5 sequential years, person holding tax lien or certificate can go to courthouse to file for a redemption on each of the liens. Period of time required for a redemption varies by state. Most do 3 full years, so year 4, whomever is full lien holder can seek to get title transferred via tax lein redemption. Property then gets recorded in courthouse under new owners name but usually takes a 6 -12/14 mo “stay” till recording appears on land records.
if your late brother had years of delinquency, please pls find out from the courthouse exactly what has happened on the property regarding tax sales. If you find it has been “redeemed”, please post an update as to this.
Now most tax sale bidders DO NOT want property, they want the intere$t paid when the owner finally goes and pays the delinquency. Interest could be 18%- 35% per year. Good bit of $ paid. Most owners pay the past due so the tax liens dissolve. But there will be bidders who do tax sales as a long term investment (the County is holding all your bid $ for every single year till a redemption or delinquency pay off happens) and the goal is to acquire property via a Redemption. Again if this has happened pls post this info. It’s ime super sticky to deal with.
I was naive about the complexity involved and laughably unsophisticated in my goals, e.g., making sure the little door-repair guy gets paid for the door he replaced the week before my brother's death. I will post as things change.
BTW: I read your profile and notice we share a couple of connections. Hurricane Katrina blew my daughter out of New Orleans (but she landed in Santa Fe, closer to me, which is nice), and George was my favorite Beatle as well.
Thanks again. More to come.
He’s an intestate death (no will). Are there possibly any other lineal heirs? You as his Sister been named his “personal rep” (not sure what that that means) but could there be any other children of his from prior marriages or relationships? Did anyone do any sort of Notice in the newspaper as to his death and a call-out for heirs? I’m asking cause if there is the possibility of other heirs, it’s going to add yet another layer to what you likely have to deal with.
So you have absolutely no interest in keeping his home, right?
There no exemptions or exclusions to MERP that could affect the ability of the state to do a recovery, right?
and you definitely want to sell it, & have that authority, right?
Right now, have you personally paid for any property costs or for his funeral, burial, or health care bills, etc?
The CU totally is ok with your ability to write checks on his old account and do withdrawals, right?
You have gotten an NOI (Notice of Intent) from MERP along with their questionnaire as to assets of his estate, correct?
So have you responded to the questionnaire and if not, by when in the letter does it read a response “must” be done by?
Is MERP stuff coming from a State Medicaid division OR coming from another entity? like HMS, PGI, which r outside contractors for recovery in many states. The letter has to indicate if that’s the case.
Do you have a probate atty? or r u attempting to DIY all this?
Is Probate actually open & you have a Case or Docket #?
You mentioned trying to figure out what kind of atty to get, so is it actually the situation that probate is NOT yet opened?
What exactly does the “personal rep” allow u to do?
You were named personal rep b4 he died?
Heres what I’d b concerned abt if probate actually is not opened… there will need to be a lineal heirship determination done (an atty to do as it has Notices that have to get done as require a pretty precise format & sequences) and then afterwards a formal Dependent type of Estate Administration petition is filed in Probate Court. If this what happens, usually you have to get a judge to sign off orders before you can do a change or distribution of assets of this estate. So you’d need to present an offer on the house that you submit to the court for judge to sign off to allow it and only after that is done, can it get sold. It’s a lot more involved that getting Letters Testamentary naming you as Executor….. for those ime the Executor has broad authority to pretty much do whatever to / for the Estate.
Any idea of property value? Look at last property tax bill… should have assessor value for land & house (“improvements”). Realistically is his assessor value close to what similar properties can sold at?
OR
is his place not at all comparable to recent sales?
Did he let upkeep, repairs & etc. get delayed or flat not done?
Would his CU totally pay off all delinquent taxes, HOA fees AND ALSO pay forward at least a year of all utilities, next years increased prop taxes & vacant property dwelling policy?
Property & probate could take mos if not yr or 2. Will be $ over time.
These ? are all about you really getting a solid on IF $ in CU can cover all this OR if it’s likely that you are going to yourself need to end up paying for things from your own purse.
Having the info, to me, at least gives knowledge needed to determine IF you want to do this. You can let his estate “escheat” to the State… you do not necessarily have to do it. State & County & HOA will be at loggerheads over $ owed; you can let it become their problem.
I’ve been an Executor x 3 & dealt w Medicaid & MERP. It can be done but will not be simple. Personally I think u need a probate atty to open probate for you, inform MERP it’s moved into court and let probate play out.
Whatever assets he has will probably go to pay back Medicaid. In the MERP letter is is mentioned the total amount that they are seeking?
Since you have a MERP letter, there is a good chance probate will be opened to deal with it. Going through Probate, there is a list of creditors that are paid first, if a creditor is way down the list and there is no money left, that creditor is out of luck.
That being said, the place trying to collect the property taxes may be out of luck.
Also If property taxes are not settled, property will have “clouds” on the title. Which means there cannot be issued clean, clear title.
Mortgage companies won’t do lending on it as there is no guarantee of ownership due to clouds. The State cannot move on the property as the County / City tax lien will keep it from being able to be transferred.
Also each year of property delinquency will have hefty interest & fees added by the Tax Assessor. Plus tax assessor will place the property up for tax sale in some way each year of delinquency. If left unpaid, it will morph into Tax Lien Deed issued on the property and eventually to a tax deed redemption. Once it goes to redemption and the lien holder records it in the courthouse as to new owner well ime, the State gets pretty much SOL on getting their recovery as change of ownership recorded via the redemption. Tax lien redemption is 4-7 year process, not simple & can get dicey, but happens.
I think your best bet might be posting this question on www.bogleheads.org or a legal website.
Hoping one of our MERP experts will chime in!