11 Apr PROPOSED NEW LEGISLATION: ONE MORE WAY TO DETERMINE STATUTE OF LIMITATIONS FOR GOVERNMENT TO MAKE CLAIM AGAINST YOUR HOME
Although there are numerous ways to avoid a successful claim for estate recovery by the state government for Medicaid benefits (such as long-term care in a nursing home, assisted living facility or care at home, in addition to drugs) as set forth in a prior article (to see article, click here), many people fail to adequately plan (such as using Ladybird deeds, transfer on death deeds, beneficiary designations, trusts, etc.) to protect assets that do not count for Medicaid eligibility from a successful claim by the state after the death of the Medicaid recipient.
If a Medicaid recipient fails to plan, then family members often search for other ways to protect assets (most typically the homestead and a car) from a successful claim by the state to recoup the benefits it advanced. At the present time, the State of Texas has no statute of limitations. In other words, if a Medicaid recipient dies owning a home, it is possible that the state can pursue a claim against the home thirty (30) years later (although that is unlikely). Some would argue that even if the state received proper notice, the state presently has no limitations period to bring suit. However, since normally there is a four (4) year statute of limitations to sue an estate, many title companies would issue a title policy on the former homestead property if no suit has been filed.
If Texas House Bill 2782 is passed, then if the Will of a deceased Medicaid recipient is probated and there is an Independent Executor or Administrator appointed, there would be a four (4) year statute of limitations from the date of death of the Medicaid recipient if the independent executor gave notice to the state. Notice to the government of probate is merely permissive – not mandatory (since the government is an unsecured creditor). This would give heirs (and some title companies) much relief since it would cut off the present unlimited time frame to sue. If the independent executor does give notice (which is only permissive, not mandatory) to the state and if the state did not present a proper claim before the 121stday after the date of receipt of the notice, then the state could also be barred by the statute of limitations (although some would say that it is not applicable under current law). However, it is not difficult to properly present a claim.
It should be noted that if there is a dependent administration (actions concerning the estate are supervised by the court), then there is only a ninety (90) day statute of limitations as the notice would be required to be given to the state. If the state failed to adequately respond after such notice, then it could be barred from recovery against the deceased Medicaid recipient’s property (although some would argue that is contrary to existing law).
Of course, like anything in life, it is best to plan to avoid potential litigation. However, if HB No. 2782 passes (which would be effective September 1, 2019), then the heirs of Medicaid recipients will have four (4) choices – (1) a dependent administration (more costly, but it may clear up title quicker); (2) independent administration (probating the Will of the deceased Medicaid recipient within four (4) years) to assure clear title after four (4) years if no notice of claim is given; (3) independent administration with the independent executor giving notice to the state hoping the state fails to make a claim within 121 days or hoping the claim is defective so that the state is barred by limitations after 121 days (least likely option since it is easy to make a proper claim); or (4) do nothing and risk a claim by the state many years from now since the government has no statute of limitations unless the personal representative takes action.
If interested in learning more, consider attending our next free “Estate Planning Essentials” Workshop either Saturday, April 27, 2019 at 10:00 a.m. or on Thursday, May 23, 2019 at 1:00 p.m. by calling us at (214) 720-0102 or signing up online at www.dallaselderlawyer.com or by clicking here. We are also having a Facebook Live Event on Saturday, May 4, 2019 from 10:00 a.m. to 11:00 a.m. Attendees of the live webinar (and the “Estate Planning Essentials” workshops) will be eligible for a free one hour vision meeting with Michael B. Cohen. Please RSVP to the “Facebook Live Event” by clicking here and then click “going” to submit your questions for Michael B. Cohen (you must be logged in to Facebook in order to RSVP). You may also submit your questions for the “Facebook Life Event” by clicking here.