Huntsville, AL asked in Elder Law and Estate Planning for Alabama

Q: Can/will Medicaid pursue asset recovery on a home that is by their calculation worth less than is owed on the mortgage?

The home is in my mother's name, but I and my family live in it. Current tax appraisal of home is $49k, and Alabama Medicaid advised me to list it for $50 -55k, but $60k is still owed on the mortgage. Will they force us to continue to try and sell, even though they would get nothing, or is there a way to keep the house? SInce it is upside-down by their estimation, doesn't that mean that technically my mother no longer has any assets?

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1 Lawyer Answer
Ben F Meek III
Ben F Meek III
  • Estate Planning Lawyer
  • Oklahoma City, OK

A: Your mom has an asset, which is the home. The mortgage may reduce the home's value to her, but it's still an asset.

There are too many unknowns that need to be looked into before you can know whether Medicaid can come after the house. One would be whether Medicaid recorded a lien against the house and, if so, did they go through the proper procedure to do so. Did their lien predate the lien of the mortgage?

You should also be aware that if your mother is deceased and left behind no spouse or minor children living in the house, Medicaid could probably pursue collection from her probate estate and could potentially force a sale of the house. However, if your mother left children (adult or otherwise) with disabilities, Medicaid may be completely barred from pursuing recovery from her estate. If your mother is deceased, you'll need to talk to an experience probate attorney where she received her Medicaid. Many offer free initial consultations. can help you find one near you. Good luck.

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