It’s very confusing when the estate recovery process begins with Medicaid, says nj.com’s recent article entitled “When will Medicaid recover funds from this estate?”

Under federal and state laws, the state Medicaid program is required to recover funds from the estates of program recipients who were 55 years of age or older at the time they received benefits. This can be nursing facility services, home and community-based services and related hospital and prescription drug services. States have the option to recover payments for all other Medicaid services provided to these individuals, except program cost-sharing paid on behalf of Medicare Savings Program beneficiaries.

In some situations, the money left in a trust after a Medicaid enrollee has passed away, may also be used to reimburse Medicaid. However, states can’t recover from the estate of a deceased Medicaid enrollee who’s survived by a spouse, child under age 21, or blind or disabled child of any age. States also must establish procedures for waiving estate recovery, when recovery would cause an undue hardship.

States may also impose liens for benefits incorrectly paid pursuant to a court judgment.

States can impose liens on real property during the lifetime of a Medicaid enrollee who’s permanently institutionalized, except when one of the following individuals resides in the home:

• a spouse
• a child under age 21
• a blind or disabled child of any age; or
• a sibling who has an equity interest in the home.

States must remove the lien, when the program enrollee is discharged from the facility and returns home.

Note that any property that belonged to the deceased Medicaid recipient at the time of their death is subject to estate recovery, even when that property was owned jointly or individually.

Therefore, Medicaid postpones estate recovery, if there is a surviving spouse or a surviving child who is under the age of 21, or is blind or permanently and totally disabled in accordance with the Social Security definition of disability.

Given that the father in this case passed away in February 2020 with a surviving spouse, Medicaid will postpone estate recovery until the mother dies.

By:  Edward J. Welch, Esq. ||| Estate Planning | Wills | Trusts | Asset Protection

If you would like to discuss your legacy options with an estate planning attorney in Jupiter or Palm Beach Gardens, Florida, schedule a complimentary call with Edward J. Welch at Welch Law, PLLC.  At Welch Law, WE WANT TO DRAFT YOUR LEGACY!

Reference: nj.com (May 26, 2021) “When will Medicaid recover funds from this estate?”