Short Answer

In North Carolina, a Medicaid lien waiver means the State has released its right to recover for the decedent’s Medicaid costs from estate assets. If that was the only reason to sell the home, the court-authorized sale can be dropped. Title to real property remains with the heirs, but any private sale within two years of death typically requires the personal representative to join the deed after publishing notice to creditors. Always confirm no other estate debts require a sale.

Understanding the Problem

In North Carolina probate, can heirs proceed with a private sale when the State waives its Medicaid estate recovery and a special proceeding to sell the home was already filed? Here, the Medicaid lien was waived after filing the court proceeding, and the heirs now want to sell privately even though title paperwork has not been updated yet.

Apply the Law

Under North Carolina law, Medicaid estate recovery is a potential claim of the State against estate assets. If the State waives that claim, it no longer competes for payment in the claims process. Real property vests in heirs at death, but the personal representative (PR) can seek possession or sell real estate if doing so is needed to pay valid claims and is in the estate’s best interest. If no such need remains, heirs may sell privately, subject to timing and notice-to-creditors rules. Within two years of death and before the PR’s final account is approved, a deed from heirs usually must also be joined by the PR (and only after the PR has published or posted the creditor notice), so purchasers take good title free of later estate claims.

Key Requirements

• Valid waiver: The Department of Health and Human Services (Medicaid) must confirm in writing that it is waiving estate recovery for this decedent.
• No remaining need to sell for debts: The PR confirms other claims can be paid without a court-ordered sale; otherwise, the sale proceeding may still be necessary.
• Heirs’ title and PR’s role: Heirs hold title at death, but within two years a buyer typically needs the PR to join the deed after notice to creditors is published.
• Notice to creditors: The PR should publish and send notices (including to the State) to cut off late claims before participating in a private sale.
• Update records and clear liens: Coordinate with the tax office/Register of Deeds for ownership records and resolve any mortgages or vehicle liens before transfer.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-70.5 (Medicaid estate recovery) – Authorizes Medicaid recovery against estates and provides the framework for waiver.
• North Carolina Gen. Stat. § 28A-15-1 (Estate assets available to pay claims) – PR selects assets to pay claims and may proceed to sell real property when appropriate.
• North Carolina Gen. Stat. § 28A-17-12 (Sales by heirs or devisees) – Private sale by heirs within two years requires PR joinder after notice to creditors to bind the estate.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Sets the priority for paying estate debts, including State claims.

Analysis

Apply the Rule to the Facts: Because the State waived Medicaid recovery, that claim drops out of the estate’s payment priority. If no other creditors require liquidating the home, the special proceeding to sell for debts is no longer needed, and heirs may consider a private sale. Since the deed and estate paperwork have not been updated and a sale would occur within two years, the PR should publish notice to creditors and then join the heirs’ deed so the buyer takes clear title.

Process & Timing

1. Who files: Personal Representative. Where: Clerk of Superior Court (Special Proceedings division) in the county where the land is located. What: File a notice or motion to dismiss the pending special proceeding to sell land to pay claims, attaching the Medicaid waiver if helpful. When: Promptly after receiving the waiver and confirming no other debts require a court sale.
2. Publish and mail creditor notices: The PR publishes the general notice to creditors and mails notice to known creditors (including the State). Typical publication runs several weeks; response windows apply by statute and can vary by issue.
3. Private sale and title work: Heirs (and spouses, if applicable) and the PR sign the deed; record with the Register of Deeds. Update county tax records. For the vehicle, resolve any lien or title issues and use the appropriate NC DMV process (for example, PR transfer or an heir affidavit such as DMV Form MVR-317, if applicable).

Exceptions & Pitfalls

• Other creditors may still require a sale. A Medicaid waiver does not eliminate mortgages, judgment liens, taxes, or unsecured claims.
• Skipping PR joinder or creditor notice can leave a buyer exposed if the sale occurs within two years and before the final account is approved.
• Unresolved vehicle liens or missing releases will block retitling; confirm with lienholders and follow NC DMV requirements before transfer.

Talk to a Probate Attorney

If you’re dealing with a Medicaid lien waiver and deciding how to sell inherited property in North Carolina, our firm has experienced attorneys who can help you understand your options and timelines. 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.