'She has contacted the mortgage company, but they will not discuss the mortgage'

"My friend inherited the house and hopes to retain it under the Medicaid hardship waiver." (Photo subject is a model.)

Dear Quentin,

My friend's father died in 2025, and her mother died in July 2026. Both were receiving Medicaid, and there will be a Medicaid estate-recovery lien against the house, in addition to an existing mortgage. My friend inherited the house and hopes to retain it under the Medicaid hardship waiver. She's desperate to keep it.

She has contacted the mortgage company, but they will not discuss the mortgage with her until she has been formally appointed executor or personal representative of the estate. In the meantime, the homeowners insurance policy is still in the names of her deceased parents, and she has not yet made any changes to the policy.

Should she be able to contact the homeowners insurance company and change the named insured/owner of the policy to either the estate of her mother or to her own name? My understanding is that leaving the policy solely in the deceased parents' names could create a problem if there is a claim, particularly now that the daughter has inherited the property.

She is working with an attorney, but we want to make sure everything is being handled properly.

Helpful Friend

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Vacant homes are a particular concern in some states, because many policies reduce coverage after 30-60 days of vacancy.

Dear Helpful,

Supporters argue that Medicaid's asset-recovery program helps offset the program's costs and preserves resources for other beneficiaries.

But that can be costly for those who are left behind. Your friend may - or may not - get lucky in her efforts to keep Medicaid's estate-recovery program from taking this house. Medicaid cannot recover certain assets from a deceased beneficiary's estate if the beneficiary is survived by a child under 21, or a blind or disabled child of any age. In some states, an adult child who served as a caregiver may also qualify for an exemption if they lived in the parent's home for at least two years before the parent entered a nursing facility.

Your friend can also apply for an undue-hardship waiver. She must apply to the state Medicaid agency after receiving an estate-recovery notice. States consider whether recovering the Medicaid costs would cause the heir severe financial hardship, like leaving them destitute or forcing them to rely on public assistance. The eligibility requirements and deadlines vary by state (but she should probably apply 30 to 60 days after the death of her remaining parent).

Justice in Aging, a national advocacy group, suggests that Medicaid estate recovery disproportionately harms low-income families, because the home is often the primary asset left behind by a Medicaid recipient. It also argues that people with fewer financial resources often have less access to attorneys and estate-planning strategies that could help protect their assets. As a result, families may lose homes and other assets.

These kinds of asset recovery can worsen housing instability, limit opportunities to build generational wealth and contribute to existing racial and economic disparities, the organization adds. Communities of color may be particularly affected because of longstanding disparities in homeownership and wealth. The fear of losing a home can also discourage people from applying for Medicaid, causing them to delay or go without necessary care services.

Related: Is $1 million enough for a household to retire? The answer keeps changing.

Insurance complications

Your friend should notify the insurance company within 30 days of the death of her mother. Otherwise, it could cause complications if - in a worst-case scenario - the house burned down or the roof blew off in a storm. The insurance company will pay out to the policyholder, but if the policyholder has died and the policy has not been renamed in the name of the estate or the beneficiaries, the assessor could argue that there has been material misrepresentation.

Bart Scovill, a wills, trust and estate attorney based in University Park, Fla., explains the legal jeopardy your friend could find herself in. The home remains exposed to risks such as fire, storms, water damage, theft and liability claims, the law firm says. If a property is part of a probate estate, the personal representative is responsible for maintaining the insurance. If it is held in a trust, the trustee is responsible.

What's more, vacant homes are a particular concern in some states, because many policies reduce coverage after 30 to 60 days of vacancy, the law firm adds. Special vacant-home insurance may be needed. If there is a mortgage, lenders generally require insurance to remain active and may impose costly force-placed insurance if coverage lapses. Locate the policy, confirm it is active, notify the insurer, update the named insured and check those vacancy rules, it adds.

"A homeowner's insurance policy is a contract between the insurer and the named insured," Scovill says. "When the insured dies, the policy does not automatically update to reflect the estate, trust, or new owner of the property. Most policies will remain in force until their expiration date if premiums are paid. However, the insurer should be notified of the death so the policy can be properly updated. If the insurance company is not informed, coverage disputes can arise."

Talk to an attorney. If your friend thinks she may qualify for Medicaid's hardship exemption, tell her not to wait to get the application process started.

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-Quentin Fottrell