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ESTATE COLLECTION/RECOVERY INFORMATION
Estate Collection is only done when a client has received Medicaid benefits at age 55 or older, and;
We also submit claims in the estates of deceased Medicaid recipients who are survived by a spouse, or minor or disabled child, but we do not insist on payment. These are “informational” claims, and some such claims are actually paid. We can collect with respect to benefits furnished to younger recipients if they were not entitled to the benefits. This occurs only rarely.
The county social service boards submit affidavits of collection in the above three incidents if the total value of the estate is less than $50,000, and no one has been appointed personal representative by a court.
- If the amount in designated prepayments or deposits for funeral expenses and any earnings on them total less than $5,000, estate assets can be used to make up the difference between that total and $5000, provided no more than $3000 can be contributed by the estate in excess of the designated funeral set-aside. While only DHS (and the CSSBs as DHS agents) can use affidavits for collection to collect debt owed by the decedent, DHS and CSSBs will distribute collections to pay for funeral services consistent with the limits of law.
- If there are no prepayments or deposits, the estate can spend no more than $3000 to meet burial costs.
- Costs of flowers, grave markers, headstones, gifts to clergy or soloists, and any other similar expenses are funeral expenses, and can be paid from either a funeral set-aside or from the decedent’s estate, provided the established total cost limits are not exceeded. Memorial monies can also be used for these purposes because they are not part of the estate.
- Family & friends may use their own money to supplement the amounts the decedent’s estate can spend on the burial. Only exception is if there is a county burial-then the family/friends’ money is deducted from the amount of the allowed county burial amount.
- Claims that must be paid before Medicaid are allowable funeral expenses, expenses of last illness, necessary and reasonable costs of administration, certain other assistance claims (GA, expended SPED, Basic Care), state hospital expenses and human service center claims. Final bill payments for phone, utilities, etc. cannot be paid from non-burial accounts after date of death. Unpaid recipient liability and other medical bills, and unpaid guardianship fees cannot be paid for non-funeral funds after date of death unless those bills are for expenses of last illness, and Medicaid did not pay for any expenses of last illness. In a court probate, DHS may argue that the Medicaid benefits that paid for expenses of last illness should have that priority.
- If an affidavit for collection is used, DHS will assure that funeral expenses (within the limits) and other assistance claims are paid in preference to Medicaid. No other bills may be paid because no other creditor may submit an affidavit for collection, no matter what the source of the debt.
- Accounts marked joint, in trust for, payable on death or multiple-party accounts must be made available to pay claims and costs of probate unless estate is big enough to cover claims before using these accounts.
- Unless claims against the estate are paid in full, property in the estate must be sold to pay the claims. Family members can purchases the property at fair market value. The “75% of fair market value” rule relates only to Medicaid eligibility, and cannot be applied to allow a family to purchase estate property at bargain prices. The family can pay claim in lieu of selling property. A will cannot alter the obligation of paying the decedent’s debts first. In fact, wills always direct that the decedent’s “just debts” be paid first.
- If life insurance is payable to an estate with a value of less than $50,000, we file an affidavit. We do not file an affidavit when the beneficiary is another party.
- Affidavits for collection can be used to collect personal property other than accounts. Consider using them if the recipient is known to have owned a valuable asset, such as an automobile. (Affidavits for collection also may be used to obtain a good title for a motor vehicle or a mobile home.)
When Probate Is Filed 1) When the client owns real property 2) If the estate exceeds $50,000
The department’s Claim Against Estate now includes a written demand for notice. The claim is filed, with the clerk of district court and a copy sent to the CSSB involved, within 90 days of receipt of the department of the Application for Informal Probate of Will and Appointment of Personal Representative. Loree Weber sends to the appropriate CSSB a copy of he Application for Appointment of Personal Representative before filing the Claim Against Estate, along with a note asking CSSB to check for a General Assistance claim. A claim from the CSSB for GA may be sent to the personal representative (or to the personal representative’s lawyer) and filed with the clerk of district court within the same 90 days, using the same Claim Against Estate format of the department with appropriate changes to correctly describe the GA claim. SFN 52 (03-2001), Spousal Assets, is to be used by the CSSBs in spousal impoverishment cases. If this form was not sent to Loree Weber when the application as approved, it should be sent immediately upon learning of the estate proceedings.)
When No Probate will be filed - When we are notified of client’s death, we should contact each holder of an asset to inform him or her an Affidavit of Collection will be filed on decedent’s account and get the current amount of the account. If the asset is a jointly held account or a POD account, immediately send the bank or credit union a written notice stating: “Pursuant to NDCC 30.1-31-19(2), this is notice from a successor of a deceased party that payments in accordance with the terms of the account should not be permitted.”
- An Affidavit of Collection is sent to each asset holder when at least twenty days have elapsed since the date of death. At the time the Affidavit is sent, we should contact each asset holder to get the current balance of the accounts. The Clerk of Court should also be contacted to confirm that no probate has been filed. All others must wait at least 30 days to file the affidavit. No other creditor may use the affidavit for collection to collect a debt owed by the decedent or the decedent’s estate.
- If we have a QS client only and the benefits paid out as listed on TECS is not more than the assets, then Loree Weber should be contacted for the amount of Buy-In paid out.
Thank you to Janice Johnson, Eligibility Worker of Griggs County for creating this document which was confirmed by Blaine Nordwall and Loree Weber as of 9/2/05! |
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