What steps do I need to take to contest a Medicaid recovery claim against my parent’s estate? – North Carolina

Short Answer

In North Carolina, a Medicaid estate recovery demand is treated like a creditor claim against the estate and is handled through the estate file at the Clerk of Superior Court. Contesting it usually means (1) getting the claim documents from the estate file and the Medicaid recovery unit, (2) raising a written objection or dispute through the personal representative and/or an estate proceeding before the Clerk, and (3) meeting key deadlines triggered by the estate’s notice-to-creditors process and any written notice of rejection or decision. Because time limits can run quickly, the safest first step is to confirm the claim’s filing date and the estate’s creditor-notice dates in the clerk’s file.

Understanding the Problem

Under North Carolina probate law, when a parent dies after receiving certain Medicaid-funded services, the North Carolina Department of Health and Human Services may seek repayment from the parent’s probate estate. The question is what steps must be taken to contest that Medicaid recovery claim during the administration of the parent’s estate, usually in the estate file maintained by the Clerk of Superior Court in the county where the estate is open. The key trigger is when the estate’s creditor-notice process starts and when the estate (or the State) sends written notices that start a short clock to object or file an action.

Apply the Law

North Carolina has a Medicaid Estate Recovery Plan that allows the State to recover, as a creditor, certain Medicaid payments from a deceased recipient’s “estate,” meaning the property that is available to pay debts in probate. In practice, the Medicaid recovery unit commonly files a written claim in the estate file, and the personal representative (executor/administrator) must decide whether to recognize, dispute, or seek a court determination about that claim. If the parties cannot resolve the dispute, an “estate proceeding” can be brought before the Clerk of Superior Court to ask for a ruling on rights and duties in the estate administration, including creditor issues and claim priority.

Key Requirements

Standing (right to be heard): The contest usually must be brought by the personal representative or another “interested person” whose rights in the estate are affected (for example, heirs/devisees who may receive less if the claim is paid).
Timely action based on notice: The estate’s published notice to creditors and any mailed notice to known creditors can start time limits for presenting and disputing claims. Missing these deadlines can make a dispute harder or impossible to raise later.
A clear legal and factual basis: A challenge must identify why the claim should be reduced or denied (for example, that the amount is wrong, the claim is not limited to covered services, the property is not part of the probate estate, or a waiver/undue hardship request applies under DHHS rules).

What the Statutes Say

N.C. Gen. Stat. § 108A-70.5 (Medicaid Estate Recovery Plan) – Establishes the State’s Medicaid estate recovery program, defines “estate,” and gives DHHS creditor rights subject to limits.
N.C. Gen. Stat. Chapter 28A (Administration of Decedents’ Estates) – Provides the probate framework for notice to creditors, presentation of claims, and estate proceedings before the Clerk of Superior Court; the exact section used depends on the specific procedural step.

Analysis

Apply the Rule to the Facts: Here, a Medicaid recovery claim is pending against the second parent’s estate, and an executor has been appointed. That means the claim dispute typically belongs in the estate administration process overseen by the Clerk of Superior Court, with the executor taking the first position on whether to allow or dispute the claim. Because the family is out of state and the estate involves real property, the practical steps start with obtaining the estate file documents to confirm what DHHS filed, what notices went out, and what deadlines are already running.

Process & Timing

Who files: Typically the personal representative files the initial response steps (requesting backup, disputing, or asking for a determination), though an heir/devisee may be able to file an estate proceeding as an “interested person” in some situations. Where: The Clerk of Superior Court in the county where the estate is open (the estate file). What: Request copies of the Medicaid claim and creditor notices from the estate file; if needed, file an estate proceeding seeking a determination of the claim’s validity/priority. When: Confirm the date of first publication of the Notice to Creditors and whether DHHS was mailed a creditor notice (often required) because those dates can start important claim clocks.
Build the dispute record: Send a written request to the Medicaid recovery unit for an itemized accounting and the basis for the claim, and compare it to the services recoverable under Medicaid estate recovery rules. At the same time, require the executor to put any demand for “income from the property” in writing and account for rents, expenses, and authority to collect, because claim disputes often overlap with administration disputes.
Escalate to a Clerk hearing if unresolved: If the executor intends to pay the claim (or refuses to challenge it) and the heirs believe the claim is improper, an estate proceeding can be set for hearing before the Clerk to determine rights and duties in the administration, including whether the claim should be allowed and how it ranks for payment.

Exceptions & Pitfalls

Not all property is always “estate” property: Medicaid recovery generally targets probate estate assets; whether the home is part of the probate estate can depend on how title was held and what transfers occurred at death.
Missing the notice trail: In North Carolina practice, DHHS is commonly treated as a known creditor when Medicaid benefits were received. If the estate did not properly mail notice to DHHS, the timing and enforceability arguments can change, but the issue must be raised with proof from the estate file.
Confusing “contesting the claim” with “not paying it”: Simply refusing to sell property or distribute funds does not resolve a creditor claim. A dispute usually needs a written objection, a negotiated resolution, or a Clerk’s determination in the estate file.
Hardship/waiver is a separate track: DHHS can have an internal waiver process (including “undue hardship” concepts). Even when a waiver request is possible, it does not automatically stop probate deadlines, so the estate-file strategy and the waiver strategy should be coordinated.

Conclusion

In North Carolina, contesting a Medicaid estate recovery claim usually happens through the probate estate file and follows the same basic structure as other creditor-claim disputes: confirm the claim and the creditor-notice dates in the Clerk of Superior Court file, obtain an itemized accounting from DHHS, and raise the dispute through the personal representative or an estate proceeding asking the Clerk to decide whether and how the claim should be allowed. The next step is to obtain the estate file and calendar the creditor-notice deadlines immediately.

Talk to a Probate Attorney

If a Medicaid recovery claim is pending against a parent’s estate and there is a dispute about whether it should be paid or reduced, experienced attorneys can help identify the controlling deadlines, gather the right documents from the estate file, and present the dispute to the Clerk of Superior Court in the proper way. 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.