Will Your Estate Owe Money to Medicaid?
Receiving financial assistance for long-term care in a nursing home from the state and federal governments is the only way many seniors can afford to stay at these facilities. The cost of nursing home care rises on an annual basis at a pace that far outstrips the ability of most people to pay for these services. Medicaid is the program most commonly used by seniors to cover the costs of nursing home care, but since the program is designed to cover those with very limited assets and other sources of financial support, becoming eligible is not that simple, and often requires the assistance of an asset protection attorney. Without proper planning, a Medicaid recipient can face depleting assets to qualify, and even leave his/her estate with an obligation to reimburse the state for benefits received. Either possibility can understandably concern recipients and their families, and leave them wondering if surviving spouses and children will be left with nothing. However, there are a number of limitations and exceptions to the state’s potential claim against the estate of a deceased Medicaid recipient, which if taken into account by an estate planning and asset protection attorney, can greatly reduce the likelihood that reimbursement will be necessary.
Limitations on Recovery
The law is very specific on when and how the state can seek recovery from a recipient’s estate, which is reflective of a desire to avoid burdening surviving family members with untenable debts. Some of the primary restrictions on the recovery of Medicaid benefits, and examples when they would apply, include:
- reimbursement cannot be sought until the recipient dies;
- recipients under 55 are not subject to reimbursement provisions;
- Medicaid will not pursue claims if the recipient is survived by a spouse, a child under 21, and/or a child who is permanently disabled or blind;
- property exempt from creditors is not subject to Medicaid recovery, e. homestead;
- executing a claim would impose an undue hardship on surviving heirs, although this option is quite difficult to obtain. Contributing factors that influence whether hardship would be found include:
- pursuing the claim would deprive an heir of funds needed for food, clothing, housing or medical care;
- the full-time care provided by the heir delayed the entrance of the recipient into a nursing home by at least one year; and
- the heir lives in the recipient’s home for at least a year, and has no other residence; and
- only assets in the probate estate are subject to creditor claims, including Medicaid reimbursement.
Thus, proper estate planning is essential to minimizing the potential exposure an estate may have for Medicaid reimbursement, as well as qualifying for Medicaid in the first place.
Is My Home Safe?
One major concern to Medicaid recipients and their families is the possibility they may be forced to sell the family home to qualify for benefits and/or to reimburse the state for medical costs. Generally, a homestead (person’s principal place of residence) is exempt from Medicaid calculations. For Medicaid recovery, as long as the home passes to an “heir” (which is a broad category of relatives), the property is protected homestead, and excluded from forced sale to pay creditors’ claims. An experienced estate planning and asset protection attorney can provide strategies to insure that the homestead residence will be protected.
Protecting your legacy for your family to enjoy once you are gone is an important priority that requires advanced planning to fully see to fruition. William Rambaum has decades of experience working with Florida seniors to maximize estate planning and asset protection strategies so that your heirs will have the financial security you desire. Contact the Oldsmar law firm to schedule an appointment.