For months now, we’ve been told by the media and by friends and neighbors about all the ways people have been affected by COVID-19. But here’s one you may not have heard about—losing the family home after the death of parents or grandparents who were receiving Medicaid benefits for long term care.
State Medicaid programs are required by federal law to recover from the estate of any Medicaid enrollee, age 55 or older, any money spent for nursing facility services, home and community-based services, and related hospital and prescription drug services.
Unless families are aware of the rules, they’ll be surprised when they receive a notice that the state has filed a Medicaid Estate Recovery claim against the estate. Under certain conditions, money remaining in a trust after a Medicaid enrollee dies may be used to reimburse Medicaid. States may impose liens for Medicaid benefits incorrectly paid because of a court judgement. Or they can place a lien against the family home.
There are legal methods to avoid Medicaid Estate Recovery against the family home, but preventative steps have to be taken before the Medicaid recipient dies.
For example, in some states, a person can give each of their kids a 1% interest in the home and title the property as joint tenants with right of survivorship. At death, the house passes to the kids with no possibility of Medicaid estate recovery.
In some states, a Medicaid recipient with a home worth less than $599,000 can create an “Intent to Return Home” document, even though they’re in a nursing facility. When that person dies, they obviously can’t return home. But the family has the right to inherit the home without paying estate recovery.
Larry Hartley is an elder law attorney at Strauss Attorneys in Ashville, North Carolina. He says, “There is no one-size-fits-all solution to Estate Planning and Elder Law issues. Every family deserves to have their individual circumstances addressed. There could be a disabled adult child who needs to be protected after the death of the Elder parent. There may be beneficiaries who have problems with addiction or handling financial assets. Experienced Estate Planning attorneys can develop strategies to address the unique needs of each family.”
There is no universal method of Estate Recovery. The rules vary from state to state. So, it’s a good idea to check with an elder law attorney where you live and see what options are available to avoid losing the family home and all its memories.