Will Medicaid Come After Your Inheritance?

Medicaid is a government program that provides medical care, as well as long term elder care, for the elderly. It is not for everybody, as there are strict income limits and requirements, to qualify for Medicaid. But often, families who were once so grateful to have Medicaid for an elderly loved one, end up not so happy, when that loved one passes away, and Medicaid wants to be paid back.

Medicaid Can Assert a Lien

Yes, upon death, Medicaid can assert a lien on the property of the estate, and ask to be paid back what Medicaid paid towards the care and treatment of the now deceased recipient (note that Medicaid is much different than Medicare, and what we’re discussing here, is mostly applicable only to Medicaid).

Because the cost of things like health care, nursing home care, or long term care are so very expensive, when Medicaid wants to be paid back from the estate in probate court, the amount that they want to be paid back, often can wipe out the entire estate, leaving little or nothing or survivors and beneficiaries.

Even if you (the estate) doesn’t have hard cash to pay back Medicaid, the State can force you to sell estate assets, liquidating them to pay off the Medicaid lien. The state can even reach certain assets in certain kinds of trusts, such as revocable trusts.

Protections and Limitations

One piece of good news is that Medicaid cannot touch or affect the family homestead in probate court so long as the homestead is located in Florida.

Additionally, Medicaid must make its claim within 30 days if it is notified of the death by the personal representative, or within 3 months if Medicaid learns of the death through other means. The personal representative will and must notify Medicaid of the death. There is an absolute 2 year limit on the amount of time that Medicaid can enforce any lien.

Waivers and Protections

There are times when the state might waive its right to be reimbursed for Medicaid expenses.

This often happens if the heirs to the deceased are minors, or is only a surviving spouse. Additionally, if the amount claimed by Medicaid is so large that it would practically completely deplete the account, the state allows the estate to apply for a hardship waiver.

However, non-exempt assets cannot be distributed to family, until the Medicaid lien is resolved, so while applying for hardship might be the best and only way to save the estate’s property, it also might delay the distribution of assets to survivors.

One powerful protection from a Medicaid lien, is that Medicaid cannot try to recover its lien, so long as there is a surviving spouse. However, when the surviving spouse passes, Medicaid can then pursue repayment against the surviving spouse’s assets and estate. The same applies when the survivors are a disabled or minor child.

Note that this right to recovery, and to assert a lien for repayment, only exists on the Medicaid recipient’s death; Medicaid will never come after someone alive for repayment absent extenuating circumstances (for example, overpayment or fraud).

Let us help you manage creditors in your probate case. Call the West Palm Beach probate law attorneys at The Law Offices of Larry E. Bray today

Source:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0409/Sections/0409.9101.html