Can I Sell My House Despite Medicaid Estate Recovery?

 In Long-Term Care Planning

Question:

I have been receiving Medicaid benefits for ten years and had no idea until recently that the state could seek money for medical expenses they paid for after I turned 55. I am 65 and am planning to sell my house in a few years and move out of state to retire. Can they seek money from the sale of the house? If I die in another state, will they go after my estate, leaving less money for my heirs? Does the state seek the original amount of the medical expense or one increased for many years of inflation?

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Photo by Eric Muhr on Unsplash

Response:

There’s good news and bad news. First, the good news: You can sell your house without reimbursing the state for the Medicaid benefits you have received to date. The state can only put a lien on your house if it’s paying for nursing home care for you.

Now, the bad news: The state’s claim for reimbursement against your estate applies no matter where you live. However, many states only seek recovery against the beneficiary’s probate estate and you may be able to avoid the claim by using a trust, joint ownership, or a life estate to hold title to your new home and other assets. (Here’s an explanation of the difference between probate and non-probate property.) A local elder law attorney can advise you on what steps make the most sense in your situation and in your new state. You can find one at www.elderlawanswers.com.

And the not-so-bad news: In calculating the amount of recovery, Medicaid agencies use the actual amount paid out without interest or any adjustment for inflation.

 

Related posts:

What are the Tax Consequences if I Transfer Real Estate into Trust?

What Should I Do with My Uncle’s Accumulated Income So He Can Be Eligible for Medicaid?

How Can I Protect Out-of-State Property from Medicaid Estate Recovery?

When to Transfer Mother-in-Law’s House When Applying for Medicaid

Showing 2 comments
  • Lorraine Krug
    Reply

    I live in nu, 11 years ago my mother died in a hospice facility, she was on Medicaid . The hospice facility did not accept Medicaid as a payor source, we promised the facility we would pay them out of the sale of her house, the house was sold for 169,000 2 months after her death. We paid the facility for her care at closing, we paid a government agency $20000 for work she had done on her house, we paid any debt she had. I thought because medicaid did not pay for her hospice care, we did not have to pay Medicaid anything. A long time later, I found out medicaid put a lein on my home for $160 000, The lawyer handling the case said he doesn’t have the records, it cost me $500 to find that out, the hospice agency doesn’t keep records after 7 years, the state agency was able to provide proof, we paid the money out of sale. My mother lived on social security for about $600, i supplemented her income since I was 18, my father died when I was 15, my mother stayed with me for 7 years before her death, she would sometimes go home a weekend, if my brother could stay with her, her Hope was to get stronger and be able to go home , that never happened. My husband and I bought our home, a humble home a town away from my mother so I could care for her it was one town away, less than 5 minutes in a car, I always cared for my mother, physically, and financially, This is so unfair, that we have a lein on our house, I have always done the right thing by my mother and my husband supported me in that, my husband is medically retired for 7 years, I need to retire, I am 67 and in remission for cancer. I am trying to resolve this before I retire. Are you able to help me? The only savings I have, is my employer saved money for all employees, I did not contribute, my husband condition is worsening as his memory is declining. I hope you can provide guidance, I did present documentation to nj estate recovery, they were considering my case. , however the worker went out on disability then covid hit. I am really trying to resolve as I need to retire.

      • Harry Margolis
        Reply

        I’m a little confused by the discussion of two homes. I can see why Medicaid would have had a lien on your mother’s home, but not yours. In normal circumstances, the lien would have been paid at the closing. Are they saying that that’s what should have happened and since it didn’t happen, they are asserting a claim against you?

        I would recommend consulting with a local elder law attorney who can assess the facts and advise you on how to proceed. Often an attorney will be able to advise you on arguments and strategies to counter the state’s claim and perhaps be able to settle any claim, depending on the circumstances. You can find a qualified attorney at http://www.elderlawanswers.com. (I know attorneys are expensive, but you have a lot at stake.)

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