[WSBAPT] Release of DSHS Real Property Lien

Wed Mar 9 10:03:02 PST 2022

Jane,

Yes, see the last sentence of the statute.

RCW 11.54.060<http://app.leg.wa.gov/RCW/default.aspx?cite=11.54.060>
Priority of awarded property-Effect of purchase or encumbrance on property.
(1) The award has priority over all other claims made in the estate. In determining which assets must be made available to satisfy the award, the claimant is to be treated as a general creditor of the estate, and unless otherwise ordered by the court the assets shall abate in satisfaction of the award in accordance with chapter 11.10<http://app.leg.wa.gov/RCW/default.aspx?cite=11.10> RCW.
(2) If the property awarded is being purchased on contract or is subject to any encumbrance, for purposes of the award the property must be valued net of the balance due on the contract and the amount of the encumbrance. The property awarded will continue to be subject to any such contract or encumbrance, and any award in excess of the basic award under RCW 11.54.010<http://app.leg.wa.gov/RCW/default.aspx?cite=11.54.010>, whether of community property or the decedent's separate property, is not immune from any lien for costs of medical expenses recoverable under RCW 43.20B.080<http://app.leg.wa.gov/RCW/default.aspx?cite=43.20B.080>.

Sara D. Longley
Senior Attorney
Ivy Law Group, PLLC
1734 NW Market Street
Seattle, WA 98107
Phone: (206) 706-2909
sara at ivylawgroup.com<mailto:sara at ivylawgroup.com>
Pronouns: she, her, hers

[cid:image001.jpg at 01CF48D6.0249B5A0]

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Jane Bitz
Sent: Wednesday, March 9, 2022 9:52 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Release of DSHS Real Property Lien

Jakob:

The reason that they can't collect is that their lien is not enforceable against the surviving spouse. (WAC 182-527-2738(3)(a). If the spouse continues to live at the property with the lien, it will be collected when the surviving spouse passes away, still owning that house. But the State doesn't actively collect on these liens, they just wait until the property is sold and their lien is found when the title report is done and dealt with at closing, like any other lien on the property.

What I had not seen before is your case where the surviving spouse probates the deceased spouse/Medicaid recipient's estate and records a Deed transferring the property (or files a Lack of Probate Affidavit?) and the Office of Financial Recovery agrees to file a Lien Release.

If that works in these cases, I will be advising clients in this situation to file the Lack of Probate Affidavit and send a copy of the recorded document to OFR requesting that they file a lien release.

Do you think the Petition for a Spousal Award had anything to do with OFR's response to you? I think that the Spousal Award statute has a specific exemption for DSHS liens for recovery of cost of Medicaid services.

Jane.

Jane G. Bitz
Of Counsel | Wolff, Hislop & Crockett, PLLC
Helping Good People do Great Things!
12209 E. Mission Ave., Suite 5
Spokane Valley, WA 99206
(509) 927-9700 (Phone)
(509) 777-1800 (Fax)
jbitz at whc-attorneys.com<mailto:jbitz at whc-attorneys.com> [Email]
www.whc-attorneys.com<http://www.wolffandhislop.com/>

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Jake Seegmuller
Sent: Tuesday, March 8, 2022 5:20 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Release of DSHS Real Property Lien

Hi Jane,

Thank you for your response. In that scenario your describing does that then result in no payment to DSHS to satisfy their lien? The department simply releases it in full? I am surprised if the department is this relaxed on the recovery of its costs.

Sincerely,

[cid:image007.png at 01D8339C.DB2799F0]
 Jakob O. Seegmuller
 Attorney
 nwlegacylaw.com | 360-975-7770

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Jane Bitz
Sent: Tuesday, March 8, 2022 2:50 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Release of DSHS Real Property Lien

My experience is that DSHS will release its lien if the surviving spouse is selling the property, but they have always required that we provide a bona fide offer and closing date. They file a release of the lien just before closing is scheduled. I have never seen a lien release for the surviving spouse under the circumstances you describe.

However, we don't ordinarily probate the deceased spouse's estate because qualification for Medicaid requires all of the couple's assets to be transferred into the name of the non-applicant spouse. (Except for one checking account with less than $2,000 in it.)

Once the lien is released, it does not 'follow' the surviving spouse or show up in his or her later probate, etc.

Jane.

Jane G. Bitz
Of Counsel | Wolff, Hislop & Crockett, PLLC
Helping Good People do Great Things!
12209 E. Mission Ave., Suite 5
Spokane Valley, WA 99206
(509) 927-9700 (Phone)
(509) 777-1800 (Fax)
jbitz at whc-attorneys.com<mailto:jbitz at whc-attorneys.com> [Email]
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THE CONTENTS OF THIS ELECTRONIC MAIL ARE CONFIDENTIAL AND PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE OR OTHER APPLICABLE PROTECTION.  Any review, use, distribution or disclosure by others is strictly prohibited.  If you have received this electronic mail in error, PLEASE NOTIFY ME BY E-MAIL, FAX OR TELEPHONE and PROMPTLY DELETE this electronic mail.  This mail cannot be modified without the express written consent of Wolff, Hislop, & Crockett, PLLC.  Thank You.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Sarah McCarthy
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To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Release of DSHS Real Property Lien

How interesting. Please reply to the list!

Sarah O'Farrell McCarthy

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

(Located on Whidbey Island, Island County, Washington)
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On Tue, Mar 8, 2022 at 1:09 PM Jake Seegmuller <jake at nwlegacylaw.com<mailto:jake at nwlegacylaw.com>> wrote:
Hello learned colleagues,

We are assisting the surviving spouse (husband) administer the estate of their deceased spouse (wife). The primary asset of the deceased spouse's estate is her community property interest in a home owned with the husband - both names on title. DSHS filed a Notice and Statement of Lien in October of 2020 for about $50k. Husband initiated probate proceedings and timely filed a Family Support Award to defeat some (or all) of the lien. A hearing was set and DSHS properly noticed. Later, DSHS circulated correspondence indicating that stated that they will release their lien without issue if the husband removes the wife's name from the property through a deed transfer. The department specifically cited a "Lack of Probate Affidavit" as a mechanism by which to circumvent their lien and the would release it.

I was not aware that DSHS would release the lien this easily. Have others had experience with this?

This raises some interesting questions: If husband removes wife from title and the department releases the lien upon recording and delivery of a copy of the recorded deed to the department (as indicated in the letter), is the lien avoided? And can this claim follow husband or reappear at his death? Is there a potential the DSHS representative is misstating DSHS's position on this?

Thanks in advance for your insights on this.

[cid:image008.png at 01D8339C.DB2799F0]
 Jakob O. Seegmuller
 Attorney
 nwlegacylaw.com<https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fnwlegacylaw.com%2F&data=04%7C01%7C%7C40720378212f41529de808da016c97ec%7C30561d3794344066948c5e35aee62621%7C0%7C0%7C637823863173821637%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=f%2BOsnuOqILEpQ%2BpZmi55mkxC%2FgqQbP6hvKzCn%2B5NySc%3D&reserved=0> | 360-975-7770

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