Short Answer

In North Carolina, the Department of Health and Human Services (DHHS) can file a Medicaid estate recovery claim against a deceased recipient’s probate estate, which may include the home. DHHS cannot make you sign over a deed; it must assert a timely claim in the estate and, if needed, seek a court-approved sale to pay it. Recovery is deferred if a spouse is living or a minor or disabled child qualifies, and DHHS may grant an undue hardship waiver. Strict notice and claim deadlines apply, and missed deadlines can bar recovery.

How North Carolina Law Applies

Medicaid estate recovery in North Carolina targets the estates of certain deceased Medicaid recipients (commonly those who received long-term care services after age 55). The State is treated as a known creditor and must file a written claim in the probate case within legal time limits after proper notice. Your signature is not required to transfer the property to the State; instead, if an allowed claim is unpaid and the estate has no liquid assets, the court can authorize an administrator to sell estate real property to pay claims.

If a surviving spouse is still living, or a minor or disabled child qualifies, recovery is deferred. In hardship cases, DHHS can waive or compromise recovery. The claim’s priority is set by statute and comes after administration costs, secured liens, funeral/burial allowance caps, and taxes. If DHHS misses statutory deadlines after being properly noticed, the claim can be barred.

Key Requirements

• When recovery applies: DHHS may recover from the probate estate of certain deceased Medicaid recipients. The State’s claim generally arises at death and attaches to estate assets that are available to pay debts.

• Known creditor and notice: Because the State is treated as a known creditor, the personal representative must mail the creditor notice to DHHS. Mailing proper notice starts the clock on the State’s deadline to file a claim.

• Deadlines to present claims: Claims are barred if not presented within the time set in the published and mailed notice to creditors, subject to limited exceptions (taxes and certain secured liens are treated differently). Medicaid recovery claims are subject to these bar rules.

• Priority of payment: Medicaid recovery gets paid only after higher-priority items, including administration expenses, secured claims up to collateral value, funeral expenses up to the statutory cap, certain burial marker expenses, and federal and state taxes.

• Real estate and sale authority: If the estate lacks cash, the court can authorize an administrator to sell estate real property to pay allowed claims. Heirs are not required to sign deeds over to creditors; sales occur through the estate process.

• Deferrals and waivers: Recovery is deferred while a surviving spouse is alive or where a qualifying minor or disabled child exists. Undue hardship waivers are available through DHHS and depend on documented circumstances; procedures and criteria can change.

Process & Timing

1. Open the estate. File for appointment as personal representative (executor/administrator) in the county where your mother lived.

2. Publish and mail notice to creditors. Publish the general notice and mail a creditor notice to DHHS (as a known creditor) to start its claim period.

3. Wait for claims. Creditors, including DHHS, must file written claims by the deadline stated in the notice (with limited exceptions). Track the claim period carefully.

4. Evaluate the DHHS claim. Confirm services covered by recovery, amounts claimed, and whether deferrals (surviving spouse; minor/disabled child) or hardship waivers apply. If applicable, submit a hardship waiver request to DHHS promptly with supporting documents.

5. Decide how to pay. If the claim is allowed and funds are insufficient, the personal representative can request court authority to sell the home. Do not transfer title informally or sign deeds to creditors.

6. Pay claims by priority. Follow the statutory order of payment. If the State missed deadlines after proper notice, discuss disallowance with counsel.

7. Close the estate. After paying valid claims and expenses, distribute any remaining assets and file the final account.

What the Statutes Say

• N.C. Gen. Stat. § 108A-70.5: Establishes North Carolina’s Medicaid Estate Recovery Program, including when the State may seek recovery and available deferrals/waivers.

• N.C. Gen. Stat. § 28A-14-1: Requires publishing notice to creditors and mailing notice to known creditors; starts the claims clock.

• N.C. Gen. Stat. § 28A-14-2: Requires filing an affidavit proving publication and mailing of notice to creditors.

• N.C. Gen. Stat. § 28A-19-3: Sets deadlines and bars for presenting claims against estates; applies to State agency claims except tax claims.

• N.C. Gen. Stat. § 28A-19-6: Establishes the order of priority for paying estate claims; Medicaid recovery ranks below administration costs, secured claims, certain funeral/burial caps, and taxes.

• N.C. Gen. Stat. § 28A-15-1: Identifies estate property available to pay debts and claims, including real property when lawfully subjected by the court.

• N.C. Gen. Stat. § 28A-13-3: Lists powers of personal representatives, including actions necessary to gather assets and, when authorized, to sell real property to pay claims.

Exceptions & Pitfalls

• Surviving spouse or qualifying child: Recovery is deferred while a spouse is living or when a qualifying minor or disabled child exists. Tell DHHS and provide proof.

• Undue hardship waiver: Apply quickly if recovery would cause hardship (for example, low-income heirs or certain family property situations). Criteria and deadlines are administrative and can change.

• Deadlines can bar claims: If DHHS receives proper mailed notice and misses the claim deadline, the claim can be barred. Keep proof of mailing and publication.

• Do not sign over the deed: Heirs usually should not deed property to DHHS. If sale is needed, it happens through the estate with court authority, preserving defenses and proper priorities.

• Personal representative liability: Paying lower-priority creditors before Medicaid (or before the claim period closes) can expose the personal representative to personal liability. Follow the statutory order and wait for the claim window to close unless assets cover all claims.

• Transfers too soon: Sales or transfers by heirs within two years of death, without proper creditor notice and estate involvement, can be void as to creditors and the personal representative. Coordinate transactions through the estate.

• Ownership forms matter: Property owned with survivorship or by the entirety may affect what is in the probate estate and how recovery proceeds. Get advice before assuming the home is “safe” or “exposed.”

Helpful Hints

• Send the creditor notice to DHHS by certified mail and keep the green card or USPS proof—this starts the clock.

• Ask DHHS for its estate recovery and hardship waiver instructions right away, and calendar any submission deadlines.

• Keep the home insured, secure, and maintained during probate; unpaid taxes or lapsed insurance can create bigger problems.

• Collect Medicaid benefit summaries, explanation-of-benefits letters, and correspondence—these help verify what DHHS can recover.

• Do not distribute or sell estate assets before the claim period closes unless you are certain assets will cover all claims.

Talk to a Probate Attorney

If you’re facing a Medicaid estate recovery claim against a loved one’s home, our firm has experienced attorneys who can help you understand your options, deadlines, and defenses. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney–client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.