The Medicaid Estate Recovery Program applies to persons who have received Medicaid services after 1994 and who were age 55 or older or who were permanently institutionalized regardless of age.
Estate recovery applies to all real and personal property that the decedent had a legal interest in at the time of his death. This includes assets owned by tenancy in common, life estates, and trusts. Recovery may be pursued through the estate of someone who had a right to live in the property until his or her death, e.g. as a deceased spouse.
A lien may be filed against real property owned by a medicaid recipient or his spouse before his death but may not be filed against the home as long as the property is occupied by a spouse, child under age 21, a blind or disabled child or sibling with an equity interest who has resided in the home for at least one year prior to the recipient’s lifetime and the individual is discharges from the nursing home, the lien is dissolved.
Generally, the recovery process begins at the death of the recipient of services. Though it may proceed against the real property of a permanently institutionalized individual upon the sale of the real property.
Recovery will not proceed against the recipient’s home as long as a spouse or disabled or minor child are alive.
Recovery will also not proceed against the recipient’s home as long as the home is occupied by a sibling who lived in the home for at least one year immediately before the individual’s admission to the long term care facility and has lived there continuously since then or occupied by a son or daughter who lived in the home for at least two years prior to the person’s admission, who provided care to the individual that delayed his institutionalized for at least two years, and who has lived continuously in the home since then.
Estate recovery may be waived if the recovery would result in undue hardship to the decedent’s survivor and produces a limited amount of income such as a family farm, and recovery would deprive the survivor of necessary food shelter or clothing. Undue hardship may also be found when survivor provided clear and convincing evidence of providing a substantial financial contribution creating an equity interest in the property or when the survivor is 65 or older and financially dependent on the estate proceeds.
If an estate is opened, the administrator must submit a form prescribed by the State, notifying the recovery program of the death and listing all assets of which the decedent was a spouse of a decedent subject the estate recovery program, the form must also list assets owned by the spouse at the time of the spouse’s death. The recovery program has 90 days to present a claim or one year after the date of death. But beware, this does not mean according to recent case law that if the estate does not submit the requisite informational form to recovery program, that the time expires one year after the date of death.
In an abundance of caution, even though no estate is opened where there is a trust, in order to avoid trustee liability the trustee would be prudent to give notice the recovery program and request a letter that no claim will be made against the trust assets.
Ohio now requires that notice be given to the Medicaid Estate Recovery Program when there is property that is transferred by a transfer on death affidavit or deed.