Medicaid is one of the best programs provided by the government for senior citizens, who need help paying for long-term care. Medicaid is a needs-based program with strict income and asset limits that must be followed; otherwise, seniors can face penalties if they do not meet those limits. There are some exceptions for assets that are uncounted for Medicaid purposes, including a house or a car. However, after the senior receiving Medicaid passes away, the government must try to collect on the costs of the program paid out from the senior’s estate. There are two ways the government will try to collect from the deceased’s estate: through estate asset recovery and real estate liens.

Estate Asset Recovery

When recovering funds through the estate assets, the state must submit a claim to the probate court for any expenses owed by the estate. However, those estate assets can either come from solely-held assets, (probate assets), or from both solely-held and jointly-held assets. This list includes any jointly-owned bank accounts and real estate, and anything that is held in a Trust. Typically, the government will only collect on probate assets. However, it’s important to find out what the laws are in your state regarding estate asset recovery. There may be a way to protect some of those assets through the use of irrevocable trusts. This would depend on your state’s laws and your personal situation.

Real Estate Lien

The government can also place a lien on any property owned by a Medicaid beneficiary when they pass away. The state collects money owing to them, on the sale of the property. This is done in the same way that a mortgage is paid off or the way a tax lien is satisfied.

There are circumstances when the state cannot recover the costs of Medicaid care. 

To learn more about the Medicaid process, or to discuss your options for Medicaid planning, please give us a call. We will set up a consultation for you with one of our elder law attorneys.