[WSBAPT] Statute of Limitations on DSHS Medicaid Lien

Tue Feb 9 13:10:23 PST 2021

Sarah:
I don’t have time to respond to all of it as I have a hearing.  But under situation 1, since wife deeded her interest to her husband before she passed, there is no recovery by DSHS because the home is an exempt asset.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Sarah McCarthy
Sent: Tuesday, February 09, 2021 12:53 PM
To: jeff at bellanddavispllc.com; WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Statute of Limitations on DSHS Medicaid Lien

I have a couple of related scenario questions involving DSHS estate recovery actions -- I'd welcome any input!

Scenario 1. Both spouses deceased.  Wife and husband had a complicated marriage, but never were never officially divorced or legally separated by the court before wife died in 2014.  They signed a "Separation Agreement" in 1976, but in the document they agreed that all of their property would remain community property, including later acquired property, and that they would remain legally married.   In 1988, wife quitclaimed to husband her share of husband's residence.  Wife also had a residence, which she sold at some point before she died.  In 1994, wife filed for dissolution, but case was dismissed for inaction in 1997.  Wife died in 2014, after spending 7 years in adult family home paid for by medicaid.  No probate was filed for wife, and we don't know if notice of wife's death was ever sent to DSHS.

Husband then died in January 2020. His death certificate recited that he was "widowed" (not divorced).

Notice of husband's death was sent to DSHS in March 2020.  We have received nothing from DSHS, going now on close to a year.  Clients are just waiting for the shoe to drop.

Question:  How do we know when/if DSHS is going to take action on this to enforce a lien for payment of wife's care against husband's estate? When should PR feel safe closing estate and distributing out assets? 4-month creditor claim period is now complete.

Scenario 2.  Husband deceased in 2009, no lien ever filed, wife still living in residence.  DSHS client husband with several years of long term care paid by Medicaid.  DSHS client husband dies in 2009 with a surviving spouse who continued to live in the residence. Residence titled in husband and wife's revocable living trust.  No probate filed for DSHS client husband, but DSHS was (we think, based on a letter from the attorney at the time) sent notice of husband's death.  DSHS didn't file a lien against the home in 2009, and still hasn't.

Question 1:  I realize that DSHS won't initiate the estate recovery action until death of surviving spouse (or at least until surviving spouse stops living in residence, such as by relocating to long term care herself), but does that mean DSHS will also hold off on filing a lien until death of surviving spouse? Wondering if the lack of any lien being filed in 2009 means that there won't be a lien filed later, after surviving spouse's death? Did this family get a freebie?

Question 2.  Since death occurred in 2009, with no lien filed, is there a statute of limitations on DSHS ability to file a lien? Or is this always going to be dependent on the surviving spouse's life span and date of death?

Question 3.  I would guess that the general prohibition on imposing a statute of limitation in an action brought by the State of Washington (see RCW 4.16.160<http://app.leg.wa.gov/RCW/default.aspx?cite=4.16.160>) means that there is no time cut off on the state's ability to file a lien or initiate estate recovery.  Has anyone dealt with DSHS on the application of RCW 4.16.160<http://app.leg.wa.gov/RCW/default.aspx?cite=4.16.160> to estate recovery?

Thanks!

Sarah O’Farrell McCarthy

(Pronouns: she / her)
Attorney | Kelly, Arndt & Walker, Attorneys at Law, PLLP
6443 Harding Avenue | P.O. Box 290 | Clinton, WA  98236

(Located on Whidbey Island, Island County, Washington)
Phone: (360) 341-1515 | Fax: (360) 341-3272
sarah at kawlawyers.com | www.kawlawyers.com<http://www.kawlawyers.com>

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On Thu, Jan 28, 2021 at 6:34 AM Jeff Davis <jeff at bellanddavispllc.com<mailto:jeff at bellanddavispllc.com>> wrote:
Listmates:

Clients mother started receiving Medicaid benefits in 2006.  DSHS filed lien against mom’s “unfinished” home in 2007.  Mom died in 2010.  DSHS has not foreclosed its lien.  Is there a statute of limitations for DSHS to foreclose?

Jeff

W. Jeff Davis, Esq.
BELL & DAVIS PLLC
P.O. Box 510
Sequim WA 98382
Phone No.:(360) 683.1129
Fax No.: (360) 683.1258
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