Question:

I am power of attorney for my dad who recently passed away. I received a letter from our state Medicaid agency stating dad owes $94,000. I have been paying his house taxes and flood insurance and keeping up the house. Can Medicaid take my dad’s house? That’s the only thing dad had. There was no money except to pay his funeral expenses.

Response:

Probably. The way Medicaid works is that it has a claim against the estates of beneficiaries for its expenditures on their behalf. This is known as “estate recovery.”  For most beneficiaries, such claims are against their homes because that’s the only substantial asset they can keep and still get Medicaid benefits. Assuming the house is worth more than $94,000, you would be able to keep the balance if you sold the house. If you wanted to keep it, you might take out a mortgage to pay the state.

There are exceptions to the estate recovery claim in cases of “hardship,” which is defined differently in every state. I’d recommend that you consult with a local elder law attorney to determine whether you might qualify for this exception or if there’s any other strategy to avoid or reduce the Medicaid claim. You can find a qualified elder law attorney at www.elderlawanswers.com.

 

Related Articles:

Does Caretaker Child Exception Apply to Estate Recovery?

Medicaid Estate Recovery and Liens

Will Medicaid Have a Claim on Deceased Spouse’s Assets Passing to Child?

Can I Avoid a Medicaid Lien on My Mother’s House?

Can I Sell My House Despite Medicaid Estate Recovery?