Medicaid estate recovery is a process by which Medicaid is able to recover or make a claim against a deceased Medicaid recipient’s estate for funds spent on healthcare services. This typically applies to Long Term Care Medicaid recipients who are at or over the age of 55. Long Term Care services include home care, assisted living care, or nursing home care.
In the State of New Jersey, a Medicaid applicant, married or single, can qualify for Long Term Care Medicaid while one or both spouses continue to be the owner of the marital residence and continue to live in the same house. As a result, many Medicaid applicants do not gift or transfer the house ahead of the time to family members for asset protection planning purposes.
However, if the house is not retitled out of the applicant’s or both spouses’ names, if married, five years before the Medicaid application, then upon death, that house becomes part of the estate. Medicaid will have estate recovery rights against the house.
Upon the death of the Medicaid recipient, the family will receive an estate questionnaire requesting asset information for the decedent. Unless the family meets certain hardship exemptions, Medicaid will be able to place a lien on the house or claim against the value of the house.
It is important to understand Medicaid’s estate recovery rules, and to take steps now to protect your house from the estate recovery.
If you would like further information on how to protect your home from Medicaid estate recovery, feel free to contact Vanarelli & Li, LLC.