Wondering if we could get some feedback on Medicaid Estate Recovery Notices we are receiving from the Indiana Family and Social Services Administration. Obviously we have set procedures we follow when we have a deceased account - depending on whether it's a single or joint account. What responsibility do we have when we receive one of these notices requesting payment to FSSA? Our attorney has been reviewing each situation and would mail a letter to FSSA stating the reason we would not submit payment to them. However, we have been receiving more and more of these letters recently. I guess our question is...what is our responsibility in providing payment to them? Shouldn't our responsibility be to pay to the estate or in the case of a joint account, the funds belong to the joint account holder. Do we need to respond to these letters at all or is this just the State's way of trying to collect whatever funds they can. How do other financial institutions handle these letters?

Any help or feedback would be greatly appreciated.

Thanks!

Their explanation.

How you respond, if at all, depends on what the notice says. If it's phrased as a "demand" which your bank is required to satisfy, my guess is that they are simply full of it.

Any jwrsp account you hold passed to the survivor at the moment of death. They say that does not defeat their claim, but that's between them and the new owner.

Any account that was solely in the name of the decedent is now under the sole dominion of a duly appointed personal representative. You are in no position to evaluate and satisfy claims against the decedent's estate.

Note, the government makes mistakes. If you "satisfy" an errant claim with money that actually belongs to someone else, my guess is that your bank will become liable for that decision, just as you should. Either way, you have consulted with your legal counsel, take his or her advice.

Thanks for the response Ken. After reviewing a more recent letter I noticed that it was updated back in July to include a section that states if we know of an estate then we pay the estate and if a relative or heir requests the funds then they can be turned over to them. It also provides a form for us to mark what we did with the funds. I'm not sure at this point why we didn't simply fill this form out and return it to them.

Thanks again for your response - it is a big help. I apologize for the other post in the deposit forum.

I requested and received a copy of the letter from the state. They did not send a copy of the form they want you to return.

The first paragraph establishes their legal claim to the funds. (Half as many words would say more.)

In the second they ask you to tell them to whom you gave the money in the decedent's accounts i.e. the estate, a relative, or an heir. They indicate they will make their claim against the recipient, whomever it might be. Without offering any legal support for the statement, they say you could give the funds directly to them, but they make no such demand. (As theirs is a "preferred" claim under state law, you probably would ultimately be held harmless if you gave them the money, but it would seem to me to be a profoundly silly thing to do.)

My previous post addresses to whom you would give the money and under what circumstances. All you are asked to do in the letter is make a disclosure, one that is probably not required by law, but seems harmless. Ask your legal counsel to help you design a routine response.