By Doug Sisson, Probate and Bankruptcy Paralegal
Liens survive virtually everyone and everything until released by a creditor. Countless folks in Kansas and Missouri have consulted with W M Law after inheriting real estate and other large assets.
One of the biggest and least expected issues can be a lien against real property the heirs may not even be aware of until it is too late.
If a loved one received any sort of medical benefits from a government or private entity, chances are they are not only owed money, but have attached a lien to property either before or after death.
The most common debts liens include: Medicare/Medicaid benefits, assisted living or nursing home care, unpaid taxes, unpaid insurance benefits, and even old judgment liens stemming from a lawsuit less than 10 years ago. There are many options to satisfy or waive these liens, however they are not going anywhere unless you are aware of them and address them appropriately.
– If you are named as transfer on death or assigned a property from an estate, you are then liable for any debts associated with liens on the property. This is quite literally inheriting a debt.
– In Missouri and Kansas, a lien typically lasts 10 years, however it can be revived and renewed indefinitely should the creditor to choose to do so every decade.
– Liens can grossly exceed the property’s value, and stay that way until paid, negotiated, or expired (10 years). We routinely see Medicaid and Medicare liens for hundreds of thousands of dollars tied to a property worth a fraction of the lien amount.
– For the most part creditors do not “execute” upon a lien by holding a foreclosure sale; rather they typically just let the liens sit until paid, expired, or waived.
This is also a cautionary consideration when buying real property from an estate. Be sure your title company goes the extra mile when searching for unsatisfied liens. In theory (and in some cases we’ve seen) multiple liens can exist, for instance: a real estate tax lien, followed by a Medicaid lien, followed by a judgment lien, followed by an estate tax lien, and (last in line to be paid) the mortgage lien.
When in doubt, give WM Law a call for a free consultation.