Congress requires each State to have a Medicaid Estate Recovery program. The concept is that, if Medicaid provides assistance to you, at your death the State may make a claim against your estate to be repaid for the assistance provided. In Ohio, an Estate Recovery claim is handled by the Ohio Attorney General. In several counties, the Attorney General has appointed Special Counsel to investigate and collect on these claims.
The “estate” against which the claim may be made is broad. It includes all probate assets that pass under one’s Will. But, this estate also includes non-probate assets, such as assets that pass through rights of survivorship, life estates & remainder interests, living trusts, etc. The only requirement is that the Medicaid beneficiary had some ownership interest in the asset the moment before his/her death.
There are some protections set for survivors of Medicaid beneficiaries. No adjustment or recovery of a Medicaid Estate Recovery claim may be made while the beneficiary’s surviving spouse, child under age 21, or child who is blind or disabled, survives. If a valid lien has been placed on the Medicaid beneficiary’s home, the claim cannot be collected as long as the home is occupied by the beneficiary’s siblings or children, in certain circumstances.
Finally, a Medicaid Estate Recovery claim may be waived, if persons affected by it apply for an “undue hardship” waiver. Examples of situations where an undue hardship may be found include where the asset is the sole incoming-producing asset of the survivor, such as the family farm; without the receipt of the estate assets, the survivor would become eligible for public assistance; and the survivor provides clear and convincing evidence that he/she made substantial personal contributions to the beneficiary, creating an “equity interest” in the property.
Often, the first contact concerning a Medicaid Estate Recovery claim is a letter from the Attorney General inquiring into assets left by the beneficiary. Everyone should explore whether recovery is appropriate.