Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country. Bob Mason is its legal columnist.
“Will the nursing home take my home?” is the question elder law attorneys constantly field.
The answer: “Maybe, maybe not, but probably not right away.”
What these people are worried about is something called “estate recovery”. In Georgia it is taking on some life and promises litigation. The current Big Question is whether the state can recover on a Medicaid lien on a life estate or other “nonprobate” property.
Estate recovery is a procedure Congress ordered in which Medicaid attempts to recover all or a portion of the benefits paid with respect to an individual from that individual’s assets upon his or her death.
Congress Offered Some Choices
Congress allowed states the option of recovering against probate assets only or against all assets. Probate assets are those assets that pass through a person’s estate and under the terms of a will (if there is one). Nonprobate assets are assets that pass pursuant to terms independent of an estate (for example, life insurance policies that name beneficiaries other than estate, joint tenancy with rights of survivorship bank accounts, or life estates in real property).
What The General Assembly Chose
The General Assembly enacted a statute to allow the Department of Community Health (DCH) to “make claim against the estate of a Medicaid recipient”.
Most elder law attorneys believe the General Assembly opted to confine estate recovery to the probate estate. First, from the clear words of the statute, it chose not to expand the definition of “estate” beyond the traditional probate estate. The way one “makes a claim against an estate” is before a probate court, and a probate court will only have jurisdiction against a probate estate.
Second, the General Assembly did nothing to address the technical manner in which non-probate assets could become part of a probate estate. For example, to make what is left of a life estate after the life estate holder has died a probate asset would require a number of amendments to ancient Georgia real property law. Under Georgia law, once a life estate holder has died, the property is free of the deceased life estate holder’s creditor claims. It is gone.
What DCH Chose
DCH elected to use the harsher method and to attempt estate recovery against all assets – ignoring (many believe) the wishes of the General Assembly.
However, Congress gave the states a choice. The General Assembly spoke. The law is well settled in Georgia that administrative agencies (like DCH) must remain within the boundaries set by their master (the General Assembly).
The law also provides exceptions to estate recovery when hardship can be proven. For example, if the deceased is survived by a spouse or a minor or disabled child.
Advance planning is wise if nursing home financing is of any concern. Avoiding or mitigating the effects of estate recovery makes advance planning particularly critical.
Finally, you should always seek assistance from qualified counsel if facing estate recovery. Estate recovery is tricky business. Make sure your attorney understands it or associates someone who does.