By Daneen Cline
One of our clients, Janet*, entered a nursing home when she was 79 years old. She had been widowed for several years and her 2 children spent her assets on her care before applying for public benefits. When Janet passed away, she had been receiving benefits for only 7 months.
Within 3 months of her death her son received a notice from an attorney, acting as special counsel of the Ohio Attorney General. The notice stated that the State of Ohio was pursuing estate recovery of the $63,875 they had spent on Janet’s care.
Estate Recovery is the program that recovers monies spent by the State of Ohio on a person’s care. The concept is that they will pay for your care during your lifetime and then recover as much of the money back as possible from the estate after your death. Any individual who receives any form of public benefits and is over the age of 55 is subject to Estate Recovery.
Janet’s son wasn’t overly concerned, his mother’s assets had been limited to the amount in her checking account at the time of her death and a life estate interest in a home. He wrote a check for $642, the amount in her checking account, and sent it to the attorney. He didn’t think the life estate was an issue so he didn’t mention it. The Department of Job & Family Services had never considered it to be an asset so it never crossed his mind that the Ohio Attorney General would consider it to be an asset.
A few months passed, he never heard from the attorney again and he forgot about the entire episode. His sister and he listed the home for sale and it went under contract very quickly. Then the title company handling the sale called him, their title search had discovered a lien on the property. The lien had been placed by the State of Ohio for the amount of $63,233 as part of the Estate Recovery program. Janet’s son made a few phone calls and discovered that the lien was valid but that the amount the State of Ohio was actually due couldn’t exceed his mother’s life estate interest. In the end, a check was written to the State of Ohio for $31,000 at the property closing.
Had Janet’s son consulted with a qualified Elder Law Attorney when he was first notified that Estate Recovery against his mother’s estate had begun, he would have discovered that the State of Ohio now has the right to place liens on any interest a person holds in real estate at their death. He also would have discovered that these liens can usually be negotiated for a reduced amount.
The State of Ohio has led the nation in monies recovered through the Estate Recovery Program. They are very good at it and are becoming increasingly aggressive. This isn’t a program that is going to go away, so it is important to consider the ramification of estate recovery in any asset preservation plan you may have.
*(names are not real)