The Medicaid
Thicket II
(Estate
Recovery)
Bob Mason
Originally
published in Coastal Senior
(May 2007)
The last few months we’ve
been talking about the
basics of qualifying for
long term care (nursing
home) Medicaid in Georgia.
You’ve spent down or (better
yet) done some planning and
reconfigured your assets.
You or your spouse is
qualified for Medicaid and
receiving benefits. But
that’s not the last
indignity. There’s Medicaid
estate recovery, a program
that has for the last year
succeeded in really stirring
up Georgians.
You may have worked hard,
done without, and paid down
your mortgage. You’ve
amassed a “fortune” worth a
hundred thousand or so. You
bought health insurance and
paid your Medicare premiums
every day. In retrospect,
it may now look like you
should have taken those
foregone vacations and spent
a bit more freely. To many,
I am sure, political
rhetoric along the lines of
“We want to help families
SAVE more!” sounds a bit
hollow.
Enough whining. Georgia was
one of the last holdouts
states to implement an
estate recovery program,
required by a 1993 federal
law. As the name implies,
“estate recovery” is
supposed to help reimburse
the state for long term care
and home and community-based
services provided through
Medicaid. The state recovers
property or funds from the
recipient’s estate, after
death, for the cost of these
services provided to the
recipient.
While Georgia held out for
some time, it took a rather
harsh approach when it
finally acted. Georgia has
decided to attempt to go
after NONprobate assets when
engaging in estate recovery.
Nonprobate assets include
assets that a person may
hold jointly with other
people (life estates in real
property, insurance death
proceeds, and the like).
Many states (North Carolina,
for example) have elected to
leave nonprobate assets
alone. If Georgia really
wanted to help in an area
that it had some discretion,
this would have been a way.
Remember that when certain
politicians try to blame all
of this on the feds.
Recovery applies to a person
of any age who dies while in
a nursing home, or to any
individual who received
nursing home, home-based,
hospital or prescription
drug services while age
fifty-five or older.
In
no event will the state will
take any action to
recover assets if the
recipient’s spouse or
disabled children or
children under twenty-one
are living. The state may
place some liens or get
ready to pounce, it just
won’t pounce while those
people are alive. Also,
estates valued under $25,000
will not be subject to
recovery.
The state may also place a
lien on any of the
recipient’s real property.
Of course, there are a
couple of important
exceptions. First, the state
may not place a lien on the
home if it is
occupied by a spouse, a
child under twenty-one, a
disabled child of any age or
a sibling of the recipient
who has an ownership
interest in the home and
lived there at least a year
before the recipient entered
the nursing home. In fact,
under federal rules the home
could be transferred to any
of these people without a
penalty.
Things
get quirkier. The rules also
say that if a lien has been
imposed, it will not be
enforced while the home
is occupied by a sibling who
lived in the home for at
least a year before the
recipient entered a nursing
home. The brother or sister
needn’t have any ownership
interest.
Also a
lien won’t be enforced while
the home is occupied by a
child who provided care for
the parent in the home for a
period at least two years
thereby stalling entry by
the parent into a nursing
home for two years. That’s
nice. No one told them that
the parent could have
completely transferred the
home to the caregiver kids
penalty free before the lien
was placed.
Also, the state will release
the lien if the recipient is
released from the nursing
home to go home for at least
thirty days.
This is all very confusing.
Do not rely on my attempts
at a simple summary. Get
legal help from an attorney
who understands these rules.
If you don’t you may save a
bit on attorney’s fees but
you may miss an opportunity
to save a home.
The heirs may seek a
hardship waiver from estate
recovery if they can show,
through clear and convincing
evidence, that the recovery
subjects them to undue
hardship. As I explained in
my last column, I believe it
is called a hardship waiver
because it will be “hard to
get”.
Next month I plan to cover
supplemental or special
needs trusts. These are a
great way for families with
disabled members to do some
creative planning. Special
needs trusts are also a
planning route for disabled
people to conserve
inheritances or other
financial windfalls (perhaps
a legal settlement). Stay
tuned!
