Posted on 10/23/2006 10:24:56 AM PDT by SmithL
To foot the bill for Mary and Lawrence Henkel's nursing home care, her children sold everything their parents owned except for the Donelson, TN home the couple had lived in since 1967.
"That was my father's dying wish - to hold onto the house, live in it, take care of it," said Nashville resident Judy Clifford, 66, one of three Henkel children. "That's what he told me, and he gave the house to me."
Now TennCare wants to sell the home to help recoup the roughly $288,000 that the state says it paid to take care of Mary Henkel in the nursing home before she died in February 2003 at the age of 81. Her husband had passed away years earlier.
The Henkel children, who value the home at $110,000, aren't alone. They're among families across the state being asked to give up the family home as TennCare redoubles its efforts to recoup some of the roughly $1 billion a year that the state pays for nursing home and other long-term care.
State officials say they're merely doing what is required by the federal government. And they point out that Tennessee isn't nearly as aggressive as some other states in recouping the money spent on long-term care.
"We're talking about a very emotional time in someone's life or in the family situation, and of course it's something that we wouldn't be unsympathetic to," said Marilyn Wilson, a spokeswoman for TennCare. "If we are going to provide Medicaid coverage, we must actively engage in estate recovery efforts."
It's a common practice for TennCare, the state's expanded Medicaid program, to go after the family homes of nursing home patients who have passed away. Generally, by the time a nursing home or long-term-care recipient gets on TennCare, the patient's family has spent down all of the family assets, except for the home.
TennCare tries to recover money when patients are 55 or older and received long-term care. It will not go after a property if a surviving spouse still lives in the house or a minor child or a child who is considered disabled by certain federal requirements lives there.
Bigger push
The state is stepping up its efforts to get properties on at least two fronts.
In April, TennCare hired an Atlanta-based outside consulting firm to help find properties that deceased long-term-care recipients passed on to their heirs without going through probate. And when it does find the property, it's going to force open an estate.
Under Tennessee law, the property can pass to the heirs without going through a probate court. But if TennCare finds out about the property, it can petition the court to force open an estate, which is what happened in the Henkel case.
The Tenncare Bureau also is looking to the state's highest courts to extend the time that it has to petition a court to get the property.
State law says all creditors have 12 months to file a claim on an estate.
Last month, Davidson County Probate Court Judge Randy Kennedy sided with another family in a fight over a home because he said TennCare waited too long to make a claim. The case was the first of several different ones in Nashville, including the Henkel case, in which TennCare forced open an estate more than 12 months after the patient died.
"We are going to appeal these cases, and the reason why is that of course both federal and state law requires that the state engage in estate recovery, and so as lawyers for the state we are duty-bound to assert all of the legal arguments available to us that support the right to recovery," said acting Attorney General Michael Moore. Moore, whose own mother is in a private nursing home, said he knew how exorbitant the cost of long-term care was.
TennCare argues that it shouldn't be bound by the statute of limitations because it involves public funds.
But experts in probate law disagree and say the one-year rule applies to TennCare.
"I don't know anybody who would disagree with Judge Kennedy's ruling," said Jeff Mobley, a Nashville attorney and an expert in probate. TennCare, he said, has asked the legislature in the past to extend the statute of limitations and is always asking for more ways to recover the money.
Paying for care
The money the Bureau recovers is only a tiny fraction of what the state pays into long-term care.
About 32,000 people on TennCare receive long-term care on any given day, spokeswoman Wilson said. On average, TennCare recoups $14 million a year of the money spent on that population. Last year, more than $1 billion of the program's overall $7 billion budget went toward long-term care.
The state generally has about 500 estate recovery cases per year, Wilson said. It's too early to gauge how successful the outside consultant will be in efforts to recover money.
Tennessee's estate recovery program is actually middle-of-the-road and nowhere near as aggressive as some states, Wilson said, specifically citing others that require nursing home patients to sell their property before they die.
But the practice of taking the family home still comes as a devastating blow to the children of the patients, one legal expert said.
"There is a sense of unfairness about it," said Tim Takacs, a Hendersonville attorney and expert on elder law. "People will come into the office here before Mama's on Medicaid and it's like, 'All she's got is this little house, and she lost her health, she lost her husband, she lost everything else, and now they want the house, too.' ''
Takacs thinks there should be an honest debate about what people should pay and what the government should pay.
He and Mobley, the probate lawyer, say people also need to do a much better job of planning for the high costs of long-term care and not wait until a family member is in a nursing home.
"We like to have people come in before they are in a crisis," Takacs said. "It's never too late to do something. It's just when they don't do anything, that's when they're likely to get an estate recovery claim."
If your mother signed off on the house completely, it is not up to her to sell it, but your sisters. They could sell it and reinvest in in another house of equal value (less expenses), and avoid tax. And the "capital gain" is bases on the difference of the sales price and the value at the time of the transfer, so the base would be "stepped up".
If he gave the house to one or more of the children, and did so legally and within the prescribed time period, then the state can't touch it. If, however, it was simply a statement, or if it was done the week before, then the state can and will come after it.
These eventualities can be foreseen and planned for. The house can be put in a trust for the kids and the parents given a lifetime right to live in it. It's perfectly legal provided this is done far enough in advance (typically 3 years) so it is not an apparent attempt to circumvent paying medical and final care bills. Legally, then, the house doesn't belong to the parents any longer and the state can't come after it.
I agree with you. There is nothing more damaging to the well-being of a free society than the delusional notion that "someone else" will pay for everything we need in life.
The issue is whether the state should recover debts owed not whether the debts are inflated.
Did she retain a life estate in the deed to them? That is a contract and is probably recorded at the courthouse. As I understand life estates, she could only sell what she has....a life estate, that is the right to live there until she dies. All she could sell would be her interest meaning that any purchaser would be acquiring an interest for the rest of your mom's life. When your mom dies then the house would revert to your sisters and they could do with it whatever they desire. Any buyer should beware of what they are buying.
The state laws are all different, some have time limits. It really does pay to have an expert look at your situation, as I assume everyone here will, before they make a decision.
susie
They do not lose "their" home. They are gone. The kids don't get the cash from the sale of the house, but they didn't have to take care of the parents either. I see your point about others not paying anything for their care - and it's going to get even worse.
That's the best point I've seen raised on this thread. LOL.
There are laws on the books governing how many years previous to the death the title must have been transferred. If the son had title prior to that time limit the state wouldn't have a claim.
You need to check on the state version of the Fraudulent Conveyance statutes. Love is not a valid consideration for a conyenance to be protected from a creditor who attacks the validity of the conveyance.
"...apparently, in TN you cannot pass it on to your kids to avoid having it as an asset. I suspect they could have sold it to the kids, but I'm not sure."
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This is the one red flag I see.
In April, TennCare hired an Atlanta-based outside consulting firm to help find properties that deceased long-term-care recipients passed on to their heirs without going through probate. And when it does find the property, it's going to force open an estate.
Under Tennessee law, the property can pass to the heirs without going through a probate court. But if TennCare finds out about the property, it can petition the court to force open an estate, which is what happened in the Henkel case.
It would appear to me that this is the same as them passing on property they don't actually own at their death, since creditors (in this case the state) did not have the opportunity to file for what was owed. For instance, if your parents die with an outstanding balance on their Visa card, that gets paid before you get your inheritence from the estate. I see this as the same thing.
FWIW I think the term *family home* in the article is just used to make us all feel sorry for these folks. What the heck is a family home? This is the parent's house, and I think it's very telling that the writer tries hard to blur this fact.
susie
If it is done outside of the 60 month period it is good.
I don't agree with that either, but because that wrong is perpetrated doesn't mean the country should pay for all others too.
Good going, Sergio. Thanks for taking care of your own. :)
The operative phrase...
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