Medicaid Estate Recovery


Question:  My mother, who is widowed, is receiving Community Based Medicaid services.  She currently owns a home in her own name; she has been hesitant to transfer it out of her name.  I am concerned about Medicaid having a claim against the house after her death, am I right to be concerned?

Answer:  Yes. Individuals who have received benefits under the New York State Medicaid program are subject to estate recovery for all assets passing through their probate estate.  This is a minimum requirement under Federal Law.  States have the option to expand the definition of estate recovery to include those assets that are non-probate. New York has adopted a narrow definition, only recovering against the assets that pass through a Medicaid recipient’s probate estate.  Practically speaking, what this means, is that where a Medicaid recipient passes away with assets in their sole name, you would need to commence a probate proceeding in Surrogate’s Court.  Once this occurs, the Department of Social Services will seek to recover any monies that they paid for services on behalf of the Medicaid recipient against that Estate.

For example, assume at the time that Mom dies she had been on Community Based Medicaid for four years, receiving live in care services. Over the course of those four years, Mom has received a care paid for by the Department of Social Services as well as assistance with Medical visits and supplies.  At the time of your Mother’s passing Medicaid will calculate the cost for the services provided to your Mother during her lifetime and seek recovery against your Mother’s probate estate equal to the amount of care paid on her behalf.   In the event that there are assets passing through her probate estate, in your case, her home, Medicaid will have the right to lien those assets. Imagine that over the course of those four years Mom received $100,000.00 in care services assuming the house was still in her name at the time of her passing Medicaid would have a recovery in the amount of $100,000.00  Contrast that with a case where those same services were provided, but Mom took the additional step to ensure that she did not have assets passing through her estate, given those circumstances under the current definition Medicaid would not have to right to lien any of Mom’s assets.

Because your mother has received services under the Medicaid program, it would be prudent for her to assure that her assets are safe from Estate recovery by engaging in  Estate Planning which will alleviate the need for a probate proceeding.  Transferring your Mother’s home into a trust will avoid the need for a probate proceeding and will ensure that Medicaid is unable to recover for the services provided.

–  Nancy Burner, Esq.

Burner Law Group, P.C.

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