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Personally, I think her estate should pay the medicaid system back if there is the money to do so. That's how it stays viable, especially nowadays.
There should be a lien on her house. In my State the recovery paperwork is sent to the nursing home. Then its up to the home to send it to the person listed as contact. That person fills in the info. The house is now an asset that Medicaid can recover from. It should have been listed on the recovery form. The State should send a letter saying the lien has been applied. The house will then need to be sold to satisfy the lien if large or someone pays the lien to keep the house. If no lien has been placed on the house, I would find out why from Medicaid Recovery. I had to do this with Moms house. I found that they were not informed of her death. Moms house was sold and the lien satisfied. I received a letter saying the lien was satisfied. If you have no lien placed on Moms house, I would check it out. If there is a surviving spouse or Caregiver Allowance living in the house, the lien will not need to be satisfied until their death or sale of the house.
This is attorney question.
Wish you the best with it. Get all the details and records together and see a probate attorney or a trust and estate specialist.
Do you mean "in a trust"?
Has her will been probated?