Mom passed away 10/23/2015. We had an Elder care attorney and his staff get Mom Medicaid eligable in 2013 when she entered Nursing Home. Spent down her cash on her Mortgage. He put her home in a Ladybird Trust. Nothing is left. No reason to probate her will. I was under the impression I would be getting letter from MERP within 7 to 10 days following her death inquiring as to whether there was an estate. No letter. Have contacted attorneys office about executing the Ladybird Trust. So...my question is if there is no probate will I get the questionare I have been expecting from MERP?
There have been posts on this site where family has gotten the initial "Letter of Intent" (to file a claim or a lien) between 3 mos to 2 1/2 years. The 2 1/2 years seem to be from states which are changing over from doing MERP inhouse (by state workers) to an outside contractor so they are doing a backlog of cases. There does not seem to be time limitation for the state to do this. The contractors seem to approach the process as debt collection agencies as they get a % of the recovery plus fees.
You may find that the LBD is not going to be entirely without issues. Yeah I know by doing a LBD you should supposedly bypass the need for probate & that is one reason to go that route so in theory....... no probate=no MERP. But LBD could be challenged OR the claim or lein placed by default (by applying for and being on Medicaid). I'd suggest fir you to speak with your atty as to what approach MERP is doing for your state and how aggressive the outside contractor is. I'd also suggest you very clearly ask your legal if they have dealt with MERP, not just doing the paperwork for the LBD. Also There is the possibility that the property may have a claim or a lein placed upon it (even with the LBD) that will create a cloud on the title. It may not be an issue to do the initial transfer (like from mom to you) via however the LBD reads because you aren't needing funding to do the transfer but there very well could be an issue with the title when the property goes to be sold later on and that buyer needs to buy via a mortgage so has to get title insurance...which means a title search on the property. And Voila! MERP's cosmic claim or lein is lurking about placing a cloud on the title.
Here's my suggestion - your state should have a specific document that is a legally binding release of MERPs claim or lein. I'd get your attorney to get this from whomever issues this (could be MERP or could be Dept of HHS) and it needs to be filed at the courthouse so will come up on the chain of legal attached to the parcel so no future clouds. Comprende?
The cloud on the title issue is something not to be ignore IMHO. There is a really good article on this & how it impacts title from a couple of years ago on StarGazer. If you Google "stargazer MERP Texas" you can find it. Stargazer is a professional interest publication for title companies.
Good luck in this and if you would, can you post an update as to what's what. Thanks as we all learn from each other
Clouds on title are a real butt rash to deal with as it kills or stalls a sale. If your buyer is needing a mortgage, they will not be able to get it as the underwriter won't do the paper on a property with clouds. Even if your not thinking about selling it, you want any clouds gone as it could be an issue if you ever want to do a HELOC or other equity lending on the property. Now if push comes to shove, you can get a quiet title action done to remove the clouds. I haven't done a "quiet title" in TX but have in other states & it's about a 3 -10 month process due to the published notifications required. IMHO you need legal who have experience in "quiet" & will usually be a real estate atty who specializes in development or site selection legal work. Most buyers aren't going to have the patience to wait for clouds to be resolved. Really get your legal to get the MERP release.
If you or others have been paying costs on the house & it has been empty, do not throw way any receipts cancelled checks, etc. hopefully your LBD gets around all issues & you get the MERP release but to be on the safe side keep all receipts. TAC allows for all required & reasonable costs on the property to be deducted from the MERP claim or payoff that HMS states is due. HMS is the outside contractor for TX as well as another dz ++ states as well.
Also if the tax assessor value isn't accurate (& you should have just gotten the bill for 2016 TX taxes in the past couple of weeks) and it is too high, I'd suggest you get the house appraised & right now when it is a close to its value related to moms death. It gives you definite & legal value on the property as it stands right now. It could be quite valuable to establish if any gifting /tax / merp / family infighting issues later on. The comps value & listing book that your Realtor does is NOT the same as an appraiser report. Appraisals seem to have a base rate of $250 and then go up depending on sq footage on entire property. Often an house inspection is done first ( by a licensed inspector) & this report given to the appraiser to enable a more complete report.
Good luck & let us know what happens!
VDP usually will be issued by a independent insurance agent. The guy I used actually had to take photos of property to get it placed. Also I had no lapse of policy from moms old State Farm homeowners to the VDP. The Allstates, USAA, State Farms don't do VDPs. Based on quotes I got on my moms house, all start @ 100k coverage so property needs to be of at least that value (or close to it) to get one written & will run 1K/2K for 6mos/1yr for minimal fire coverage. The independent agent asked for most current tax assessor statement to verify. Most VDP are written for under construction properties or for 2nd/3rd homes, so a low value home in a more marginal area may not be able to get a carrier as easy as a 300k house. Comprende? If people will be going through the house (like its on the market or workers doing construction or repairs), you'll need to make sure there is a rider attached to cover that.
Really you need to make sure that you have a valid house policy in force. I don't know how much $ (or $$$$) you & hubs have fronted on the house but you don't want to see it all go up in flames with no insurance.
Also has your atty mentioned putting the property in the name of a trust or an LLC? Rather than in the name of you & your Sister?
Even when you get the LBD done & property transferred to you (& sisters) name, you probably will need a VDP unless one of you is going to be able to legally make it your primary residence. Yeah, I know, even after death you still need to keep that checkbook open........
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