My Mom died on October 15, 2014.She willed her house (which has a reverse mortgage) to her six children, and the house is under contract for sale. As the assigned personal representative, I received from the Department of Health Care Finance a notice of intent to recover money against my Mom's estate for Medicaid benefits she received. The notice is dated October 15, 2015, but the envelope is postmarked October 18, 2015, A lien has not yet been placed on the property.
Setting aside the ? on statute of limitations for a minutia......what is the RM situation? When the house which is under contract sells, and the RM repaid and all closing costs, fees, etc all totally paid from the proceeds of the sale, will there be any $ left? If so, MERP is going to want that $ first & foremost before any heirs. Now whether they can step in & do this will depend on a couple of things.
So did you open probate? If so, do you have executor related expenses?, do others - besides the RM - have claims against the estate that were entered in probate? If probate opened, then everbody (you, other heirs & MERP) are subject to probate rules. How that happens depends on MD laws. Like for example some states have probate as a Level of Claims by Classes & claims are paid in the order of their class. So like for TX executor expenses are a class 2 & get paid first before MERP which is class 7. IMHO for family having all go through probate is better when dealing with MERP.
If you aren't doing probate, then MERP can place a on property a lein which had to be satisfied & released at closing for the house sale to go through. It can delay the sale as it will show up in the title search done right before closing unless you get through closing before the lien is placed.
There was someone n this site who wasn't aware of MERP & had her moms low value house under contract for 30K, title company found the MERP claim against the house for the entire medicaid tally a week before the sale which was way way more than the house value. It killed the deal. It took the daughter over a year to settle & get a release from merp by paying about 5k as she had valid documented expenses on the property (taxes, insurance, legal) & she has subsequenky sold the property.
The debtor is the state and whether the state is subject to statutes of limitations depends on your states laws. It's not at all like CC or other leins that have a set # of years. There is someone on this site who is going to keep the parents property & pay the taxes on it for 10 years as that is the statute of limitations for state owed debt. Empty house for a decade works for them.
Hopefully you go to closing like mañana & before the lien is placed so the RM is over with and the buyers can't seek damages for the contract falling through. Whatever $ is left, really needs to be set aside & not go to any heirs. MERP is going to want those funds. I'd bet the state could hold any tax refunds to you to recover the amount and with interest as you are on file as the representative.
If your state has an outside contractor to do MERP, it will be a very aggressive debt collector approach to recovery.
If you can let us know what happens too. Thanks!