Short Answer

In North Carolina, you clear a nursing home or Medicaid lien from inherited real estate by: (1) bringing the property under the personal representative’s control as an estate asset; (2) properly handling the creditor’s claim (mail notice to known creditors, confirm timeliness and amount); and (3) paying the valid claim or, if needed, petitioning the Clerk of Superior Court to sell the property and pay liens from the proceeds, then recording a written release to clear title. If the claim is late or invalid, you can seek disallowance and a court order to cancel the lien.

Understanding the Problem

In North Carolina probate, can the personal representative remove a nursing home lien from a decedent’s home when title stayed in a sibling’s name and the home was left out of the estate? This comes up where the decedent was incompetent, a deed change happened anyway, and the property now carries a nursing home or Medicaid lien while the estate remains open.

Apply the Law

North Carolina law makes all real property available to pay valid estate debts when necessary. Even if title vesting passed at death to heirs or a devisee, the personal representative (PR) can bring the real estate under the estate’s control to pay claims. Known creditors (including the State for Medicaid estate recovery) must get mailed notice, and claims must be presented within statutory deadlines. If cash is insufficient, the PR can petition the Clerk of Superior Court in a special proceeding to sell the real property to create assets to pay claims. After a claim is paid, the creditor must provide a written satisfaction or release for recording to clear the lien from the land records.

Key Requirements

• Make the home an estate asset: Use an estate proceeding to recover or confirm the estate’s interest and obtain possession/control, then file a supplemental inventory.
• Handle the claim correctly: Publish notice to creditors and mail notice to known creditors (including DHHS for Medicaid); verify the claim’s timeliness, amount, and class.
• Pay or sell to pay: If the estate lacks cash, petition the Clerk to sell the real property to create assets and satisfy liens/claims in the required order.
• Record the release: After payment, obtain and record a written satisfaction/release from the creditor (or an order canceling the lien) to clear title.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-70.5 (Medicaid estate recovery) – Authorizes the State to seek recovery of certain Medicaid-paid services from a decedent’s estate.
• North Carolina Gen. Stat. § 28A-19-3 (Deadlines to present claims) – Sets time limits for creditors to present claims (including known-creditor mail notice rules).
• North Carolina Gen. Stat. § 28A-15-12 (Actions to recover estate property) – Allows recovery or examination proceedings to bring property into the estate.
• North Carolina Gen. Stat. § 28A-17-2 (Petition to sell land to create assets) – Sets petition contents and process to sell real property for payment of debts/claims.

Analysis

Apply the Rule to the Facts: Because the home stayed in a sibling’s name and was omitted, the PR should first use an estate proceeding to recover or confirm the estate’s interest and obtain possession. Next, the PR should confirm that creditor notice was published and mailed to the nursing home and to DHHS; if the claim is untimely or defective, seek disallowance. If valid and the estate lacks cash, the PR can petition to sell the property to create funds, pay the lien from the proceeds, and then record the creditor’s release to clear title.

Process & Timing

1. Who files: Personal Representative. Where: Clerk of Superior Court in the county where the estate is pending (recovery proceeding) and, if needed, where the property lies (sale proceeding). What: Verified Petition to Recover Estate Property with an Estate Proceeding Summons (AOC‑E‑102); later, a Petition to Sell Real Property to Create Assets. When: File the recovery petition promptly; publish notice to creditors and mail notice to known creditors, then await claim deadlines (known creditors generally have 90 days after mailed notice; publication runs at least three months).
2. After recovery/control, if the claim is valid and the estate lacks cash, file the sale petition. Heirs/devisees are served, and the Clerk can authorize a public or private judicial sale. Allow time for the required procedures, including any upset bid period; timing varies by county.
3. At closing, pay lienholders in order of priority from sale proceeds. Obtain a written Satisfaction/Release from the nursing home or DHHS and record it with the Register of Deeds. File a supplemental inventory and the estate account reflecting payment.

Exceptions & Pitfalls

• If the deed was signed while the parent was incompetent, the PR still needs a court order in the estate proceeding to restore the estate’s interest and obtain possession; record the order to protect title.
• Do not pay a lien until you confirm the claim was timely presented and properly classified; mortgage and tax liens are paid before general claims.
• To sell land to pay claims, you must serve heirs/devisees under Rule 4; missing a necessary party can void a sale order as to that person.
• If a claim is rejected, the creditor has a short window to sue after written rejection; track that deadline before distributing or closing.

Talk to a Probate Attorney

If you’re dealing with an omitted home that now has a nursing home or Medicaid lien, 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.