Thomas R. Mullen Quincy MA Estate Planning, Recovery, & Liens

Under Medicaid law, following the death of the Medicaid recipient, the Commonwealth must attempt to recover from his or her estate whatever benefits it paid for the recipient’s care. However, no recovery can take place until the death of the recipient’s spouse or as long as there is a child of the deceased who is under 21 or who is blind
or disabled.

Massachusetts must attempt to recover funds only from the Medicaid recipient’s probate estate, meaning property that is held solely in their name. Given the rules for Medicaid eligibility, the only probate property of substantial value that a Medicaid recipient is likely to own at death is his or her home. However, since Massachusetts has not opted to broaden its estate recovery program to include non-probate assets, it may not make a claim against the Medicaid recipient’s home if it is not in his or her probate estate.

In addition to the right to recover from the estate of the Medicaid recipient, the Massachusetts Medicaid agency must place a lien on real estate owned by a Medicaid recipient during her life unless certain dependent relatives are living in the property. If the property is sold while the Medicaid recipient is living, not only will she cease to be eligible for Medicaid due to the cash she would net from the sale, but she would have to satisfy the lien by paying back the state for its coverage of her care to date.

The most common exception to this rule is when the spouse resides in the house; other exceptions are when a disabled or blind child, a child under 21, or a sibling with an equity interest in the house is living there, or if a child (of any age) has resided in the home and provided care to the Medicaid recipient for two years prior to the recipient’s application for Medicaid. Note: The care must have been sufficient to have kept the elderly person out of the nursing home. So for example, if your mother had Alzheimer’s and you need a Boston medical malpractice lawyer you would qualify. However if you lived in the home and your mother was independent but fell and fractured her hip, clearly you would not qualify.

Exceptions To The Transfer Penalty

Transferring assets to certain recipients will not trigger a period of Medicaid ineligibility. These exempt recipients include:

1.  A spouse.

2.  A blind or disabled child.

3.  A trust for the benefit of a blind or disabled child.

4.  A trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, but only under certain circumstances).

In addition, special exceptions apply to the transfer of a home. The Medicaid applicant may freely transfer his or her home to the following individuals without incurring a transfer penalty:

1.  The spouse.

2.  A child who is under age 21 or who is blind or disabled.

3.  To a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, but only under certain circumstances).

4.  A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home.

5.  A “caretaker child” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.