Attorney Thomas B. Burton answers the following question in his popular Real Estate Question and Answer Series: "How to Find Out Amount of Medicaid Claim After Mother Died in Wisconsin?"
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Hello, I'm Attorney Thomas Burton and today we return to our popular Question and Answer Series!
Today's question is the following: "My mother-in-law died two weeks ago without a will. Wondering about selling her home and claims from Medicare. Her spouse is deceased and my spouse is her only living child. Her mobile home has a fair market value of $25,000 but will end up selling for $13,000 and have a willing buy. The home is paid off and there are literally no other assets. She most likely has up to $10,000 owed through Medicare, although we haven't been informed of an exact amount. So I'm guessing we will have to pay the state with the proceeds from the sale of the home? We plan to transfer through affidavit. Also does it matter that it won't be sold for fair market value? We live in Wisconsin."
Okay, excellent question, there's a lot going on here, first of all, I just want to say I think you're referring to Medicaid because if she was receiving long-term care assistance, it would be through the Medicaid program and that's who would have a lien for repayment after her death from her assets and you mentioned that, $10,000 old, so just for our other viewers, Medicaid is the program that would pay for long-term nursing home care when you are diminished assets that you qualify.
So you're correct you can use the transfer by affidavit method in Wisconsin for a small estate with total probate assets less than $50,000. So if the total assets subject to administration are less than $50,000, you can use that method to transfer the assets which can include real property, bank accounts and personal property. There's a section on the transfer by affidavit whereby you must send notice to the state recovery program via certified mail before you attempt to transfer the assets in question, under the transfer by affidavit and you should take a look at Wisconsin statute 867.03, for full details. You send the claim to state recovery and then they have a period to get your notice and respond and they should send you a letter with the amount of the claim at that point. In my experience, working with clients when I've done this on their behalf, I send in the notice and usually get a letter back a week or two later with the amount of the claim and the state recovery will lay out for you the details and you're correct, that if you use the transfer by affidavit, you still must pay all debts of the decedent and the order of priority listed in the statute before you could distribute any assets to yourself or in this case, your husband who's the only living child.
There's more information available about transferring a mobile home, available on the department of safety and professional services website. That's DSPS in Wisconsin, they're the ones who deal with mobile home titling and they have a special page being a transfer by affidavit. So I suggest you check this out because I looked at this before, for other clients because mobile homes fall into this gray area between traditional real estate house where the house is attached to the ground and so you're going to want to look at that section from DSPS and how to use the transfer by affidavit to get that title transferred and then, just a little excerpt from the transfer by affidavit here, the obligations you're undertaking, if you use that method, it says, "By accepting the decedent's property under the section the heir trustee person named in the will that act as personal representative or person, who is guardian of the decedent", the decedent is the person who died, "At the time of the decedent's death, assumes a duty to apply the property transferred for the payment of obligations according to priorities established under Wisconsin statute 859.25 and to distribute any balance to those persons designated in the appropriate governing instrument, is defined in Wisconsin statute 854.01 of the decedent or if there is no governing instrument", meaning no will or trust, "According to the rules of intestate succession under chapter 852, subject to paragraph b."
So you should look at that and check out those statutes and that 859.25 establishes the priority of payment of debts and Medicaid and estate recovery would definitely be in their high on the list. So they would need to get repaid but again, send that notice to them and they generally will send you a letter with the amount of the claim and then a little brochure walking through in plain English some of that about the debts you can pay and then the remainder. If their amount is more than the value of the total estate then you would pay the remainder to them. If the claim is less, then you just pay the amount of the claim before you can distribute to the heirs.
So I would be careful about, you mentioned it has a fair market value of $25,000 but you're going to sell it for only $13,000 to willing buyer, I guess if, I would be careful about that because if you have debts to pay and a claim from Medicaid, they need to get repaid and generally, you need to sell the asset for fair market value. So if there were no debts or anything and your husband wanted to just sell the house for less than it's worth, that's one thing to, I don't know if you know the buyer or not, but if you need to repay debt, you need to sell assets for fair market value or as close as you can what the market will give. So you fulfill your duty as or your husband's duty as acting as fiduciary on behalf of the estate here.
So if you have any questions about that, I would get together with a qualified estate planning and probate attorney, who could help you with the transfer by affidavit, walk you through it, those websites and statutes I pointed you to, it's designed that it is something you can accomplish on your own. So I encourage you to continue with it. Just check out the website and follow the instructions closely on the DSPS website and the transfer by affidavit and get that sent in and they should get you the notice of the claim then back in the mail.
So excellent question and thank you for asking. For other viewers watching, this is a good example of what happens after someone receives Medicaid, long-term care assistance, to pay for nursing home care or other in-home care and then after they pass, the state has that claim on the assets of the estate and if it's a small estate, this transfer by affidavit method is often what can be used to transfer the assets. By smallest estate I mean, total assets under $50,000 and that's what the questioner was referencing in this question. So I thought it was a very good question and useful to a lot of others of you out there who may be going through this situation.
So thank you for tuning in and if this video has been helpful to you, please consider giving it a LIKE, so that others can see and benefit from this information as well.
Thanks for watching and we'll see you next time.
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