Will Medicaid Come after My Mom’s Estate?
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 Medicaid recipients who were 55 years of age or older at the time they received Medicaid 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 Medicare cost-sharing paid on behalf of Medicare Savings Program beneficiaries.
This is called “Medicaid Estate Recovery”.
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.
In general, under Louisiana law, a Medicaid lien on an exempt asset (almost always a home) would pose an “undue hardship” if (1) the home is worth more than one-half (1/2) the median value of the homes in the parish in which the home is situated; and (2) Medicaid has spent more than such amount on the Medicaid recipient. This is a general rule.
In most Louisiana parishes, one-half (1/2) the median value of a home hovers somewhere between $60,000 and $80,000. In other words, if the home in question is worth more than that (and it likely is), your home is potentially subject to seizure.
So if you are thinking, “my home (or my mom’s home) is exempt from Medicaid”, think again. It may be exempt on the “front end” when a loved one goes into the nursing home, but may be subject to seizure on the “back end” after your loved one has passed away.
States are allowed to 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.
Fortunately, Louisiana does not (as of 2021) impose a lien when the Medicaid recipient is alive and in the nursing home. Considering Louisiana’s budget, this may change in the near future.
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. But this is a mere postponement.
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.
The situation can be very different if the home is owned solely by the Medicaid recipient. In other words, the Medicaid recipient is a widow or widower.
Here is the bottom line that you need to know: If you don’t have any form of long-term care insurance, then you are at risk of your assets, including your home, being subject to nursing home costs, and then eventually Medicaid Estate Recovery. This could be a lawsuit instituted by the State of Louisiana against you. In other words, even if your home is “exempt” on the front end, it may not be exempt on the “back end”.
I can guarantee you that every person that is in a nursing home right now has said at one point “I will never go into the nursing home.” But they are there not because they want to be there, but out of necessity. The extended family, who often have their own responsibilities, may not provide the level of care necessary for their loved one, despite their best wishes and intentions. For example, I had a female client in her 70s come in to see me who has an only male child in his 50s. The son expressed to me that not only was providing “intimate care” to his mother difficult (because he has a job of his own), but the intimate nature of providing for his mother was very awkward to say the least. Only female sitters or a nursing home can provide the level of care that the the elderly mother needs.
Neither one of them wanted the mother to be in a nursing home, but they have no other choice.
Do you have long term care insurance? If not, then you should have a long term care plan developed by an attorney specializing in Elder Law and Estate Planning.
BOOK A CALL with me, Ted Vicknair, today to discuss how Medicaid qualification and Medicaid Estate Recovery would apply to your particular situation. Every case is different. The longer you wait, the more the government and the nursing home can get.
Reference: nj.com (May 26, 2021) “When will Medicaid recover funds from this estate?”