What Is Medicaid Estate Recovery?
Medicaid is a program run by the individual U.S. states that elders can use to help them afford long-term care in their golden years. Many Westchester County residents have ‘spent down’ their assets and availed themselves of Medicaid’s assistance. However, after a person’s passing, Medicaid can deliver some very unwelcome news: in certain cases, the program is obligated – not permitted, but obligated – to “recover certain Medicaid expenditures” such as those spent on long-term care. The right attorney can help.
Keeping The Program Afloat
The Medicaid estate recovery program (MERP) exists in order to ensure that Medicaid has sufficient funds with which to continue operating, as its costs in covering long-term care can rise into the billions. It does not apply to every Medicaid applicant, but it still covers a wide percentage of them: namely, recipients aged 55 or over or who were permanently institutionalized in a ‘medical facility’ at the time of their passing. Essentially, Medicaid may seek a lien on a decedent’s assets or home (if not owned jointly), and attempt to collect on that loan as a creditor during the probate proceedings for the estate.
It is worth noting that any beneficiaries of a person’s will are not personally responsible for satisfying debts to Medicaid, at least not in the state of New York. It is also sometimes possible to plead undue hardship – that is, to show that Medicaid recovery would be an undue and unfair hardship to the decedent’s surviving family. However, it can still be an unpleasant shock for beneficiaries when there is a sudden creditor’s claim on a decedent’s estate that is unexpected.
What Can I Do?
If you are a person who worries about Medicaid estate recovery after your passing, the easiest way to guard against it is to plan your estate in a manner which leaves very little for the program to take. While every case is different, the two most common assets that Medicaid may seek to reimburse themselves with are a person’s home (if owned solely in their name and they had an intent to return to it), and any bank accounts with assets below the limit. There are several legally appropriate ways to ensure those assets go to your chosen beneficiaries.
One of the most commonly chosen is known as a Medicaid Asset Protection Trust (MAPT). As with other types of trusts, a person’s home or other assets can be placed in a MAPT before their passing, removing them from their probate estate. Since Medicaid may only recover from assets in probate, the home will be safe from MERP. However, it is crucial to plan this part of your estate at least five years before your application for Medicaid, because the program has what is known as a “lookback” period. Gifts or transfers made during this period will result in penalties for a Medicaid recipient, which mean a temporary loss of care.
Contact A Mahopac Medicaid Planning Attorney
Planning one’s estate is never an enjoyable task, but the knowledge that Medicaid may wind up in possession of your assets means that your estate plan must protect those you care about. A Mahopac Medicaid planning attorney from Meyer & Spencer, PC can help you plan your estate in a way that preserves your family’s traditions. Contact our office today to schedule a consultation.
Source:
omig.ny.gov/casualty-estate-recovery-estate-recovery
