Medicaid Estate Recovery: Exceptions


by Gabriel Heiser - Date: 2007-01-25 - Word Count: 565 Share This!

It's not enough to qualify for Medicaid unless you also plan for the possibility of "estate recovery." That's when the state presents a bill to the estate of the person who had been receiving Medicaid, for all Medicaid payments it made on behalf of the Medicaid recipient, following that person's death. There are some exceptions, however, that prevent such recovery. Let's take a look at a few of these.

If you were under age 55 at the time you received Medicaid benefits other than nursing home care, then you will be exempt from estate recovery.

If you are survived by a spouse, a child under age 21, or a blind or totally and permanently disabled dependent, you will also be exempt from estate recovery. Technically, the federal law states that recovery can be made "only after the death of the individual's surviving spouse." So if, for example, the surviving spouse dies a month after the Medicaid recipient spouse, a state could file a claim for recovery at that time. Many states, however, have taken a more liberal reading of this, and so long as there is a surviving spouse, no recovery will be made, no matter how long or short the surviving spouse lives. Once again, you'll need to check your state's own laws to find out which rule applies to your situation.

Notwithstanding the above, even in a state where recovery may be made after the surviving spouse's death, there typically is an additional limitation that applies to all claims against an estate: all states have a statute of limitations that bars claims against an estate that are made more than a certain number of months after the death. In many states, that limit is one year. So, in a state with this rule, if the surviving spouse dies more than a year after the Medicaid recipient spouse, it will be too late for the state to file its claim for estate recovery.

If a state can only file a claim when there is no child under 21, can they wait until the child attains age 21 and then file their recovery claim? Once again, this must happen within the statute of limitations period, assuming there's not a blanket exemption if there's a surviving child under age 21, period.

There will be no recovery made against the exempt home of the Medicaid recipient (i.e., it will not have to be sold to pay back the state) if

a sibling of the Medicaid recipient was living in the house for at least one year immediately prior to the date the recipient was admitted to the nursing home and who has continuously lived in the house since then, or

if there is a son or daughter (of any age) of the Medicaid recipient who was living in the house for at least two years immediately prior to the date the recipient was admitted to the nursing home, who has continuously lived in the house since then, and who provided care to the Medicaid recipient prior to his or her entering the nursing home which permitted the recipient to delay entering the nursing home.

If all else fails, there's an exemption against estate recovery if such recovery would work an "undue hardship" on the surviving family members. One example would be where the exempt asset is a working farm, and a forced sale of that farm would throw surviving family members out of work.


Related Tags: nursing homes, medicaid, long-term care, estate recovery

İ 2007 by K. Gabriel Heiser

Attorney K. Gabriel Heiser has devoted his legal practice to Medicaid planning, elder law, and estate planning for the last 23 years.
NOTE: For more information on this topic and other Medicaid planning techniques, see http://www.MedicaidSecrets.com, which describes an exciting new 256-page book written by attorney Heiser, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets." You don't have to go broke to get Medicaid to pay your nursing home bills, you just have to know the rules and planning techniques. For the first time ever, you can learn the inside secrets of high-priced estate planning and elder law attorneys, in attorney Heiser's new book.

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