By Attorney Daniel Vu

You have always paid your bills on time. Never made a late payment. Never even kept a large balance on your credit cards. Yet, you, like many other Ohioans, receive a threatening collection letter from the Ohio Attorney General for the purpose of collecting on a Medicaid debt owed to the State. No, not your Medicaid debt, but a debt owed by a loved one’s Estate. Perhaps your late father or grandfather stayed in a nursing home before he passed away. During that stay, he qualified for Medicaid benefits but now that he has passed, the State has come to collect. But from whom? The Attorney General, through a Special Counsel they appointed, is collecting from you, the potential beneficiary of a Medicaid recipient’s estate. So whether or not you received an inheritance, the collection notice was still sent to you demanding information and/or payment.

These overly intimidating collection notices serve only to scare family members. They usually state boldly “YOU MUST REPLY WITHIN 10 DAYS.” Some letters state “failure to respond may result in legal action being taken against you.” Others state that “this is a collection notice” or that “this is an attempt to collect on a debt.” Do you provide more information than they are entitled to receive? Worse, are you duped into paying them more than what should be paid? Too often the answer to both the questions is, yes.  And who can blame you when the notices make blatantly ominous threats.

In the past decade the State has become more aggressive than ever before. The decision to allow the Attorney General to appoint private collection attorneys to act as Special Counsel has only made this worse. Now, private collection attorneys, acting as Special Counsel, with the incentive of commission from anything they collect, are treating ordinary Ohioans like the debtors they have been used to dealing with. In fairness, the high-pressure tactics of some of these Special Counsel attorneys are only a reflection of the State’s need to solve a budget problem.  However, the unfortunate result is that I have seen clients who have grossly overpaid the State because they been unnecessarily stressed and intimidated. So, if you receive a notice from the State, take a deep breath, then find an experienced elder law attorney to help you.

By Dan Vu

As the attorney handling our firm’s estate recovery cases, I am often asked, “How long does the State have to collect on my parent’s estate?” or “Isn’t there a statute of limitations for the State to recover these assets?” The answer will many times surprise them. The Ohio Attorney General, who administers Ohio’s estate recovery, has maintained that they have no statute of limitations and that they can collect on a parent’s non-probate estate FOREVER.  And for those of you who have seen the movie The Sandlot, I am sure you mouthed that slowly with me.  Yes, forever. The Ohio Attorney General argues that even ten years after a Medicaid recipient has passed away, the State could recover from the beneficiaries any amount distributed to them from the Medicaid recipient’s estate.

To make a clarification, this is for the Medicaid recipients NON-probate estate. For their probate estate, there is a definite time period for the Attorney General to submit a claim. For assets in probate court, the Attorney General must make a claim or lose their claim against those assets. However, for those who have had some estate planning done, most if not all of their assets avoid probate. This is done for many good reasons. On the other hand, this places an 800-pound piano hanging over the beneficiaries’ heads forever. This strikes most people as patently unfair. And in my opinion, it is unfair. For the rest of us, we have a certain time period to settle on our affairs. For example, if you hit my car and I wait 10 years to sue you, I will be laughed out of court! But for the Ohio Attorney General, when they sue a beneficiary years after the Medicaid recipient has passed, the only one laughing will be the Attorney General.

All of this can be upsetting, but don’t stop reading. There is some good news! The trend in Ohio has been to rectify these unfair and unjust laws that allow the State to collect on a debt indefinitely.  The Ohio Legislature passed House Bill 390. This bill set a statute of limitations for the Ohio Attorney General to collect on certain tax debts. This was a major blow to the Ohio Attorney General’s revenue recovery office. No longer could the Ohio Attorney General wait 10 years before making its first attempt to collect on an alleged tax debt. The same needs to happen for Ohio’s Medicaid Estate Recovery Program. But if this does not occur because of legislative action, the courts may be doing it themselves.

In the Eight Appellate District in Ohio, the Ohio Attorney General has recently lost a very important case. In this case, In re Estate of Centorbi, the Court held that the Ohio Attorney General has one year to present an estate recovery claim. That means the Ohio Attorney General must send out a letter notifying the beneficiaries of its Medicaid recovery claim within one year of the Medicaid recipient’s death. This is a major victory for beneficiaries. No longer will they be blind sided by a Medicaid claim years after the Medicaid recipient has passed. Of course this is not a full victory yet. This ruling is only binding in the Eight Appellate District of Ohio. It certainly is a persuasive precedent in other districts, but each district will have the final say until the Ohio Supreme Court ways in. In light of this, I personally asked the Assistant Attorney General managing Ohio’s Estate Recovery Program whether he would willing to abide by that ruling elsewhere in Ohio. Surprise, the answer was … NO! Furthermore, this ruling is not a complete victory because it does not address the fact that the Attorney General still has forever collect on a claim once it is timely made. So Ohio still has a lot further to go in this regards. But the trend has started in both the legislature and in the courts. Lets hope it continues.

If you receive a letter from the Ohio Attorney General, call our office for a free consultation.