If you are caring for your elderly parent, it is important that you understand what to expect when your parent receives Medicaid to pay for long-term care. The professionals at Elder Care Direction work with families so that they can understand how to help their relatives to qualify for Medicaid and to protect the estates from Medicaid recovery.
The Medicaid estate recovery program
The Medicaid estate recovery program aims to recoup the money that the state has spent to pay for a beneficiary’s care. When a beneficiary dies, the state may try to recoup the money that it paid from the decedent’s estate. If the recipient did not own any assets, then the state will not recover any money. The program cannot try to recover money from the children of the deceased beneficiary.
What assets might be subject to Medicaid recovery?
In most states, the assets that might be subject to the Medicaid estate recovery program are assets that are included in the probate estate. These assets include assets that are titled in the beneficiary’s name or assets that are titled as tenants in common if they are jointly owned. Assets that do not go through probate such as real estate that is titled as joint tenancies with the right of survivorship, stock owned in a transfer-on-death form, and bank accounts that have payable on death beneficiary designations, are protected. Some states do allow Medicaid recovery of assets under an expanded definition. In those states, Medicaid may go after most assets, including those that are not probated.
Preparing for Medicaid estate recovery
If you live in a state that does not follow the expanded definition, you can simply take steps to make certain that your loved one will not have a probate estate when he or she dies. You can do this by making certain that all of the assets are owned jointly with the right of survivorship or in the form of a payable on death, transfer on death, or an annuity. You can retitle your loved one’s home as a JWTRO. However, it is important to recognize that the gift of ownership is effective when the deed is changed.
Exemptions to Medicaid estate recovery
There are some exceptions to Medicaid estate recovery. One simple rule is that if the Medicaid recipient was younger than age 55 when they began receiving Medicaid benefits, they are exempt.
Medicaid beneficiaries who are survived by spouses, children who are younger than 21, and disabled or blind children of any age are also exempt. While the federal law technically states that there is no recovery while a surviving spouse is still alive, many states choose to apply this rule in a more generous way. In those states, Medicaid recovery will not occur regardless of how long the surviving spouse lives. In states in which recovery can occur after the death of the surviving spouses, there are normally statutes of limitations. If the surviving spouse lives beyond the statute of limitations, the state will not be able to collect.
The state cannot seek to recover from the exempt home of a recipient in the following two cases:
- The Medicaid recipient’s sibling lived in the home for a minimum of one year before the recipient entered the nursing home and has continuously resided in the home since that time.
- The recipient’s child lived in the house for two years or more before the recipient was admitted to the nursing home and has continuously lived in the home since that time . The child must also have provided care to the recipient before the admission to the nursing home.
Finally, there is an exemption if the recovery would cause an undue hardship on the family members who survive. If you have concerns about the Medicaid estate recovery program, it is a good idea for you to consult with Elder Care Direction. We can offer you some guidance about steps that you can take to protect your loved one’s estate. Contact us today by filling out our online contact form.