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Medicaid Estate Recovery

Medicaid estate recovery activities are federally and state mandated. When a Medicaid recipient dies, his/her property's value can be used to repay Medicaid benefits. The Department of Human Services has a claim against the estate of any Medicaid recipient who was age 55 or older, or permanently institutionalized regardless of age when the assistance was issued. The claim is for the amount of Medicaid issued. The Medicaid Estate Recovery brochure may also be accessed on the Department's Medical Services Publications page.

No claim for Medicaid that was correctly issued must be paid during the lifetime of a Medicaid recipient's surviving spouse or while there is a surviving child who is under the age of 21 or who is blind or permanently and totally disabled.

No claim is made for Medicare Savings Program benefits paid after December 31, 2009.

What if the decedent leaves a will?

A decedent's estate must first pay the decedent's debts. A will does not change that. Unless an estate has sufficient cash to pay all claims, estate property is sold to pay the claims. Family members can purchase estate property at fair market value.

Can funeral expenses be paid from an estate?

If a Medicaid recipient designates funds for funeral expenses, those funds (up to $9,000) and any earnings from those funds can be used for funeral expenses. If there are no funds designated for funeral expenses, the estate can spend no more than $3,000 to meet the expenses. Any funds designated for funeral expenses must be reported to the county social service office before the recipient's death.

Family and friends can use their own money to help pay for the funeral expenses. Additional amounts cannot be paid from assets in the decedent's estate before Medicaid claims are paid in full.

What other claims can be paid before the Medicaid claim is paid?

The decedent's estate can pay funeral expenses, expenses of last illness, the necessary and reasonable costs of administration, certain other assistance claims, and claims on behalf of the State Hospital. The Medicaid claims must then be paid in full before other creditors or claims can be paid.

What if an account is payable to someone else at the decedent's death?

Unless all estate claims are paid in full, money a decedent left in a joint account, an "in trust for" (ITF) account, or any other payable on death (POD) account must be made available to pay claims and costs of probate. If the money was properly designated as a deposit for funeral expenses, the money can be used for that purpose.

How is the Medicaid claim made?

If a decedent leaves only cash and limited personal property, the county social service board, or the Department of Human Services, will usually collect the amount that must be paid for assistance claims using an Affidavit for Collection of Personal property. Sometimes family members will be asked to help sell personal property that has value so claims can be paid. If there is real property that is worth the cost of probate, or if there is some other reason a probate is necessary, the person named in a will or some other family member can be appointed personal representative and properly distribute the decedent's estate. Attorney's fees and other reasonable costs of administration can be paid from the estate. The county social service office will usually intitiate probate only if there is no family member willing or able to do so.

If you have questions regarding estate recovery, call the estate recovery unit at (800) 755-2716.

 

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