[WSBAPT] FW: DSHS Lien on Real Property Recorded After the Property's Sale

Diane J. Kiepe DJKiepe at depdslaw.com
Thu Jan 12 10:08:34 PST 2023 

Thanks for the update so glad all was resolved!  Jane thanks for the instructions you had provided prior.

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Natalie Kuehler
Sent: Wednesday, January 11, 2023 12:11 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] FW: DSHS Lien on Real Property Recorded After the Property's Sale

Hello all,

You may recall my email regarding a lien DSHS had recorded on my client's property after they purchased it from the surviving spouse of woman who passed away owing money to Medicaid and whose estate was never probated. I am happy to report that, thanks to the excellent guidance received from all of you, once we got a hold of the right DSHS person and explained the situation as laid out below, the lien was immediately removed.

Thanks again to all of you weighed in and guided me through this!

Natalie

Natalie N. Kuehler

CONFIDENTIALITY STATEMENT: This message contains information that may be confidential and protected by the attorney-client privilege. If you received this message in error, please notify the sender immediately and delete the message.


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 <jbitz at whc-attorneys.com<mailto:jbitz at whc-attorneys.com>>
Date: Wednesday, October 19, 2022 at 5:14 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale
The Buyers could contact DSHS Office of Financial Recovery 360-664-5700 to see if the lien can be lifted based on the fact that the surviving spouse is the person who sold the property. Ordinarily the lien itself has the contact information for the OFR worker who has filed the lien.

The State cannot recover a lien against a surviving spouse:

182-527-2738. Estate recovery--General right to recover.
(1) When the agency may file. After a Washington apple health client has died, the Medicaid agency may file liens to recover
the cost of services subject to recovery that were correctly paid on the client's behalf.
(2) Notice requirement.
. . .
(3) The agency may not recover from the client's estate so long as there remains:
(a) A surviving spouse; or
(b) A surviving child who:
(i) Is age twenty or younger; or
(ii) Is blind or disabled as defined in WAC 182-512-0050.

As a practical matter, if one spouse is receiving Medicaid assistance, we have them Quit Claim their interest in the property to their spouse (often using Durable Power of Attorney). If I meet with a surviving spouse where the state has asserted a lien for the care of their spouse whose name is still on title, we can either file a probate and distribute to the surviving spouse from probate or a LOPA recording the LOPA and the deceased spouse's death certificate. The Agency will probably record a lien anyway, but if the surviving spouse wants to sell the property we contact the Office of Financial Recovery and ask them to remove the lien. Sometimes they will remove it immediately, other times they ask to see a signed Purchase & Sale Agreement and will remove the lien just prior to closing of the sale.

Hope this helps,
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 Diane J. Kiepe
Sent: Wednesday, October 19, 2022 3:29 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

I can't think of more than a time or two that I have used a LOPA in my practice.  I tell people (especially if 2 years have not gone by) it's best to probate when real estate is involved.  Someone once told me that very early in my career and it stuck.

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

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 Candace Wilkerson
Sent: Wednesday, October 19, 2022 2:02 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Wow.  This is pretty terrifying.  It makes me wonder if doing a Lack of Probate Affidavit is a bad idea if there is real property involved?  I assist clients with doing them all the time.

What about the attorney who drafted the Lack of Probate Affidavit for the seller-would that attorney be sued for malpractice if the seller gets sued?  And how to avoid a problem like this?

Best,
Candace Wilkerson

*Candace is available to respond to emails and phone calls between the hours of 7:00 a.m. and 3:00 p.m.  If you have an urgent matter outside that time period, please call our office at the number below.

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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 Diane J. Kiepe
Sent: Wednesday, October 19, 2022 2:15 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

So the insurance company was wise to protect their interest by excluding wife's creditor's of her estate for claims that would have been disclosed.  This likely takes them off the hook.  Because no notice to creditor's was given, I read the rights of DSHS running 2 years.  In essence, and off the cuff without more research, I would think your client's have a cloud on title and that they may have a claim against seller if the property passed by warranty deed. As between DSHS and buyers, I am not sure if there is a bona fide purchaser defense, particularly since no probate took place.

>From a practice standpoint, I  would call DSHS and try to get the amount they are claiming as their lien.  Then, depending on the amount, you can make a plan moving forward.

I am so interested in knowing how this turns out.  If you can share with us the end result down the road, I sure would appreciate it.

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

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 Natalie Kuehler
Sent: Wednesday, October 19, 2022 10:56 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Thank you both! The title insurance policy has an exclusion for creditors of the predeceased wife's estate that would have been disclosed if a probate action had been filed, so getting coverage for this might prove difficult.

Natalie

Natalie N. Kuehler

CONFIDENTIALITY STATEMENT: This message contains information that may be confidential and protected by the attorney-client privilege. If you received this message in error, please notify the sender immediately and delete the message.


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 Marcus J. Fry <mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com>>
Date: Wednesday, October 19, 2022 at 10:48 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale
Natalie:
Contact the title insurer because this should have been insured against fbo your clients.


Marcus J. Fry
Attorney | Witherspoon * Kelley
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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 Leighann Hansing
Sent: Wednesday, October 19, 2022 10:19 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale


RCW 41.05A.090 (6) A lien authorized under this section relates back to attach to any real property that the decedent had an ownership interest in immediately before death and is effective as of that date or date of recording, whichever is earlier.


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 Natalie Kuehler
Sent: Tuesday, October 18, 2022 1:07 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Hello all,

I have clients who purchased real property from a widower, with title insurance that was secured by the widower's completion and filing of a lack of probate affidavit. No probate for the wife's estate was ever opened, and the lack of probate affidavit confirmed that there were no outstanding debts or expenses arising from his wife's last illness. After the sale closed, but within two years of the wife's death, DSHS filed a Notice and Statement of Lien (Estate Recovery) for an undisclosed amount.

Can DSHS enforce the Lien against the real property even though the property was sold to my clients at market rate? Are there any deadlines for enforcement of a DSHS lien that is placed on property after the surviving spouse of the deceased debtor has sold it? The lien at this point is already over two years old, and the real property was transferred to my clients over three years ago.

Any thoughts (or referrals) would be appreciated.

Thank you!
Natalie

Natalie N. Kuehler
THE KUEHLER LAW FIRM PLLC
PO Box 3059 - 1112 State Route 20
Winthrop, WA 98862
o: (509) 996-2832 x1 - c (509) 557-5769
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