| You've met with your elder law attorney, you've come | | | | out of luck. It can't go after the kids' money. There |
| up with a plan of action, time has gone by, and your | | | | must be some assets that the nursing home resident |
| parent has entered the nursing home, with Medicaid | | | | had a legal interest in, at the time of death, in order for |
| paying the full cost. Your family members have | | | | the state to be repaid. |
| managed to preserve virtually all of their assets | | | | In many states, the only "legal interest" of a deceased |
| through careful planning, so you feel that the lawyer's | | | | Medicaid recipient that is taken into consideration is the |
| fee was well worth it! | | | | individual's so-called "probate estate"; that's an asset |
| A number of years go by and your parent has now | | | | that was titled in the sole name of the individual, or as |
| passed on to a better place, but before you've finished | | | | a "tenant in common" if jointly owned. It's the assets |
| grieving you get a letter from the state Medicaid | | | | that will pass under a person's will. For example, |
| Recovery Unit requesting repayment of every dime | | | | something like a joint bank account, stock owned in |
| they paid out on your parent's behalf! You're | | | | "TOD" (transfer on death) form, a bank account with a |
| depressed, angry, confused. You stare at the paper | | | | "POD" (pay on death) beneficiary, an annuity interest, |
| and can't believe it. "I thought we were all set, that | | | | and real estate that's titled as "JTWROS" or "joint |
| once Mom was on Medicaid we didn't have to worry | | | | tenants with right of survivorship," are all non-probate |
| about that any more....Can this be correct?" you ask | | | | assets and therefore protected against the state's |
| your siblings. | | | | claim for reimbursement. |
| Unfortunately, the answer is "Yes." What you have | | | | A number of other states, however, have passed |
| just been confronted with is something called Medicaid | | | | laws that permit recovery against an "expanded |
| "estate recovery." Essentially, it requires repayment of | | | | definition of estate." The federal Medicaid laws permit |
| the entire amount of Medicaid benefits that were | | | | this. Under such an expanded definition "estate" could |
| made during your family member's stay in the nursing | | | | now include joint property, life estates, living trusts, and |
| home. | | | | any other asset in which the deceased nursing home |
| Prior to 1993, such estate recovery was optional---a | | | | resident had any legal interest at the time of death. |
| state could implement it or not. However, in that year a | | | | Boy, that makes it tough! This even goes against |
| new federal law was passed (known as OBRA '93) | | | | hundreds of years of common law, but it is legal, and |
| that mandated that every state must seek estate | | | | there have been a number of court cases that have |
| recovery from its Medicaid-receiving residents, | | | | backed this up. |
| following their deaths. | | | | Now if you live in one of the "probate estate only" |
| In essence, while you thought you had qualified your | | | | states, you should feel lucky, but remember that at any |
| family member for a government handout, all you've | | | | time your state can revise its laws and go with the |
| really received is an interest-free loan! And upon your | | | | broader definition. And your family member will not be |
| family's member's death, the state wants its loan paid | | | | "grandfathered in" if he or she received Medicaid |
| back. | | | | benefits before the change in law in your state; there |
| Now if you're sharp, you may be thinking "Wait a | | | | have been court cases that have ruled on this, stating |
| minute...if someone qualifies for Medicaid, they have to | | | | that it's the law in effect as of the date of death of |
| be essentially broke. So where exactly is this money | | | | the Medicaid recipient that counts. |
| coming from to repay the state?" That's a good | | | | Well, what should you do to plan for this, assuming you |
| question, and the good news is that if your family | | | | can do anything at all? And are there exceptions to |
| member died owning nothing, then indeed the state is | | | | this harsh rule? See my other articles on this topic. |