A newly enacted state law limits how long the bureau of TennCare has to file a claim against an estate, and that’s complicating the path to returning a property to the tax rolls in Cumberland County.
“I keep telling myself surely there is an heir,” County Attorney Philip Burnett told the Cumberland County Health and Safety Standards board May 13. “But I’m looking for an avenue to make this happen.”
The owners of the home on Bent Tree Dr. passed away in 2010 and 2013. The house has sat idle since then, and Burnett has been unable to identify any potential heirs.
Burnett had been able to find that one of the owners had been in a nursing home for some time before her 2013 death. TennCare had a $108,000 lien it could have filed against the estate.
Burnett had hoped TennCare would act on its lien to allow the property to be sold in place of locating an heir.
TennCare provides long-term care services such as nursing home care and community based services for seniors 65 and older and residents with physical disabilities.
If TennCare pays for these services, they can seek reimbursement from the patient’s estate after their death. This is accomplished through the state’s probate process, which uses the assets of an estate to settle debts owed by the deceased individual. Anything left over after creditors have been paid can then be distributed to the heirs.
The law had required representatives of individuals 55 years old or older to provide notice of the death to TennCare and seek a release from the bureau of any benefits or premiums paid on the individual’s behalf, a waiver of TennCare’s claims, or a statement from the bureau that no amount is due.
Courts could not close an estate without this document.
In April, the Tennessee General Assembly established new time limits for this process. TennCare has 12 months from the individual’s date of death or four months from the date it receives a notice to file a claim against the estate.
If TennCare does not receive a notice to creditors within 12 months of the individual’s date of death, it has four years to seek a claim against the estate or it is barred from seeking recovery.
It is estimated the bill will decrease state revenue by about $1 million annually. That’s based on an average of $3.2 million in collections from estates in 2018 and 2019 that were more than four years old. The state provides about 33% of federal medical assistance costs, with the remainder paid by the federal government.
That new law put the property outside the statute of limitations for collections, Burnett said.
“Six months ago, they [TennCare] would have been all over this,” Burnett told the board. “But they will sign a release and have no interest in it.”
No taxes have been paid on the property since 2009. However, Burnett said the Cumberland County Clerk and Master was not yet selling properties from 2009.
“She could sell it, but it may be a year or more down the road,” he said.
Burnett suggested the board take bids and spend money cleaning up the property, which needs to be bush-hogged and mowed.
“That would make the county a creditor at that point. A creditor can open an estate,” he explained.
That would allow the probate process to begin. The property could then be sold to satisfy the county’s expenses.
“It would be a unique thing to do,” he said.
That would allow the property to be sold, returning it to the tax rolls and likely bringing homeowners to the community to look after the house and its grounds.
Tom Isham moved to take bids and hire a contractor to clean up the property, supported by Craig Clark. The motion was approved.
Burnett reported a second property on Jada Dr. has been sold by the heirs of the estate. The sale has not been recorded.