Be aware of Medicaid "estate recovery" risk

Medicaid collects “estate recovery” after someone passes away to “pay back” the costs paid out.

This applies to people who:

• Are over 55 who have received Medicaid assistance

• Are permanently institutionalized and received Medicaid assistance, regardless of age

Medicaid may also try to recover assets that were gifted or distributed to beneficiaries during the last few years of someone’s life, or in the last few years before entering a care facility.

Medicaid cannot go after someone for assets if:

• They are the surviving spouse and are still alive

• They are a disabled child under 21. However, Medicaid may come for asset recovery after this person turns 21

• They are a sibling caregiver who has an equity interest in the property and have lived there for at least one year before the deceased entered a care facility

• They are an adult child caregiver and have lived at the property for at least two years, with or without equity interest

There may also be an exception granted if the asset recovery will cause undue hardship or if the sum of the recovered money is very low. An example of undue hardship includes if the estate has a family farm or other family business that produces a limited amount of income upon which the family depends.

The assets that are included are dependent on the state, but they range from all of the assets to only the assets that go through probate.

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