If there is property that is not in the estate, it may not be subject to the Medicaid Estate Recovery. Only property that passes through probate court will be affected. In most cases, the property will be owned jointly and it will then pass to a survivor without going through probate. If the recipient of Medicaid is survived by the other owner, the property will not be subject to Medicaid Estate Recovery.
Exempt cases that are not subject to Medicaid recovery
In addition, any life insurance proceeds that are payable directly to a beneficiary will not be affected by Medicaid Estate Recovery. These proceeds can only be subject to recovery if they are paid directly to the estate.
In many cases, an adult child or sibling may retain money from the estate that they have contributed in order to care for the recipient before they began to receive Medicaid services. If they contributed to the upkeep of the home, they may be exempt from recovery. Some exempt transfers include any transfer that has been made in which the client receives market value for the asset, any asset that has been transferred to a Medicaid recipient's spouse, a transfer made to trusts for the benefit of a spouse or disabled child and transfers of an exempt asset.
Cases when transferring a home without Medicaid penalty
It is possible to transfer the home without any penalty. However, this can only be done if it is transferred to a spouse, a child under the age of 21 who is disables, an adult child that resided in the home for two or more years before the applicant was institutionalized and provided care to the applicant and a sibling that resided in the home for a year or more and has an equity interest in the residence.
Medicaid applicant's spouse may transfer interest to another person without affecting Medicaid eligibility
Once a married person goes into a nursing home and they become eligible for Medicaid, the spouse may then transfer the interest in the home to another person without the transfer having any affect on the Medicaid eligibility. This means that the Medicaid applicant can transfer their share of the home to the spouse who can later give it to other heirs. While this will not affect the Medicaid applicant currently receiving services, it will create a period of Medicaid ineligibility for the spouse.
Non-countable assets could be under Medicaid recovery
Non-countable assets that are protected under the CSRA can be subject to Medicaid recovery. Each state has a program that can recover any money that has been spent on nursing home care from the deceased person's estate.
Planning for long-term care and Medicaid eligibility can require a lot of work. The advice received should be sought from a qualified professional that can help the individual manage their assets in a way that will help to protect them and their assets, and at the same time, grant the person eligibility for Medicaid.
Read more information on Medicaid:
- Medicaid asset
- Medicaid Rules Purchasing Annuities
- Medicaid Transfer Assets
- Medicaid Gifting Rules
- Medicaid Joint Accounts
- Hide Assets from Medicaid
- Medicaid Assets
- Medicaid Home Equity
- Medicaid Laws
- Medicaid Annuity
- Medicaid Income First Rule
- Medicaid Long Term Care Insurance
- Medicaid Look Back Period
- Medicaid Life Estate
- Medicaid Loan
- Medicaid Deficit Reduction Act
- Medicaid Case Study
