Short Answer

In North Carolina, Medicaid estate recovery (MERP) is a creditor claim the North Carolina Department of Health and Human Services (DHHS) can file in probate. You contest it by (1) ensuring proper notice to DHHS and watching the claim deadline, (2) having the personal representative dispute the claim or ask the Clerk of Superior Court to decide it, and (3) applying to DHHS for an undue hardship waiver with proof. Recovery is generally against probate assets, and limited deferrals/waivers may apply.

Understanding the Problem

In North Carolina, can you, as an adult child handling a parent’s probate, stop or reduce a DHHS Medicaid estate recovery claim so you can keep living in the family home? The parent’s house was solely in the parent’s name. The question is whether and how you can contest the claim and request an undue hardship exception so the home is not sold during estate administration.

Apply the Law

Under North Carolina law, DHHS may seek reimbursement from a decedent’s probate estate for certain Medicaid benefits. This is done as a creditor claim in the estate. The personal representative (PR) must publish and mail notice to known creditors, including DHHS, and then decide whether to pay, dispute, or ask the Clerk of Superior Court to rule on the claim in an estate proceeding. DHHS also administers hardship waivers; if granted, recovery can be reduced, deferred, or denied. The Clerk of Superior Court is the forum for estate proceedings, and claim deadlines are controlled by the notice-to-creditors process.

Key Requirements

• Timely claim by DHHS: DHHS must present a written claim within the bar date set by the estate’s notice to creditors unless a statutory exception applies.
• Asset must be in the probate estate: Recovery targets probate assets available to pay debts; the PR may need court authority to sell real estate to satisfy claims.
• Correct claim priority: Medicaid recovery is paid in the statutory order of claims; it does not leapfrog higher-priority items.
• Hardship review by DHHS: The heir/occupant must promptly request an undue hardship waiver and submit proof; it is not automatic.
• Clerk can decide disputes: If the PR disputes the claim or its priority, an estate proceeding before the Clerk of Superior Court can resolve it.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-70.5 (Medicaid Estate Recovery) – Authorizes DHHS to recover certain Medicaid payments from a decedent’s estate and provides limits/deferrals.
• North Carolina Gen. Stat. § 28A-19-1 (Presentation of claims) – Requires creditor claims to be in writing and explains how they are presented.
• North Carolina Gen. Stat. § 28A-19-3 (Bar of claims) – Sets deadlines after notice to creditors; certain government tax claims are exempt, but most state agency claims must meet the bar date.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Establishes the priority classes; Medicaid recovery is paid in its statutory class, after higher-priority claims.

Analysis

Apply the Rule to the Facts: Because the house was solely in your parent’s name, it is a probate asset that can be used to pay valid estate claims. DHHS must present a written claim within the deadline set by the PR’s notice to creditors; if it does not, the PR can assert the bar. Even if the claim is timely, you can request a hardship waiver from DHHS; if the waiver applies, recovery may be reduced, deferred, or denied, and the PR can ask the Clerk to recognize that outcome when paying claims.

Process & Timing

1. Who files: The personal representative typically manages claims. An interested heir may also petition if needed. Where: Clerk of Superior Court in the county where the estate is administered. What: Publish and mail the required notice to creditors (AOC-E-307 affidavit of notice), then, if disputing MERP, file an estate proceeding petition and serve an Estate Proceeding Summons (AOC-E-102). When: The notice to creditors sets a claim-by date at least three months after first publication; observe any shorter response window stated in DHHS’s waiver notice.
2. Request an undue hardship waiver from DHHS immediately upon receiving its MERP notice. Follow the agency’s instructions and deadline. Submit documentation such as proof you lived in the home, caregiving that delayed institutionalization, financial hardship, and current occupancy. The PR can hold payment on the MERP claim while the waiver is pending.
3. If DHHS’s claim is denied or disputed, set a hearing before the Clerk so the court can determine validity, amount, and priority. If payment is required, the PR may seek authority to sell the real property to satisfy claims and then close the estate after final accounting.

Exceptions & Pitfalls

• Deferrals: No recovery while a surviving spouse is alive or while a child under 21 or a blind/disabled child resides in the home; confirm these statuses before paying the claim.
• Scope: North Carolina generally recovers from probate assets; do not assume nonprobate assets are subject unless the law pulls them in to pay claims.
• Hardship is not automatic: You must apply to DHHS and supply proof on time; missing agency deadlines can forfeit relief.
• Notice missteps: Failing to mail notice to DHHS can extend the time for DHHS to file a claim; be sure the PR mails notice and files AOC-E-307 with the Clerk.
• Priority errors: Pay claims in the statutory order; Medicaid recovery is not paid ahead of higher-priority claims and allowances.

Conclusion

To contest North Carolina Medicaid estate recovery on a parent’s home, make sure DHHS receives the estate’s creditor notice, verify whether DHHS filed a timely written claim, and have the personal representative dispute the claim or seek a ruling from the Clerk of Superior Court. If hardship applies, promptly request a DHHS waiver with supporting proof. The next step is to publish and mail notice to creditors and, if needed, file an estate proceeding to determine DHHS’s claim and its priority.

Talk to a Probate Attorney

If you’re dealing with a Medicaid estate recovery claim against a family home, 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.