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Medicaid Estate Recovery

We counsel numerous people about the potential for the State of Michigan to recover Medicaid Assistance Payments from the estate of a deceased Medicaid patient. Medicaid pays for nursing home care (if an individual qualifies on both an income and an asset basis) as well as other medical expenses. Planning becomes intricate and detailed where a Medicaid patient (nursing home resident) is married and there is a healthy spouse still at home.

In the case of a single Medicaid patient, their families, are often concerned about the State of Michigan’s efforts to recoup Medicaid assistance payments, usually from a patient’s residence. This situation arises because a residence is a non-countable asset. A Medicaid resident can still own a house even though they are in a nursing home.

The State of Michigan has initiated very aggressive tactics to try to recoup Medicaid assistance from Probate Estates, which may include the patient’s residence. Attorneys have often recommended Ladybird Deeds for nursing home residents that still own a home. This can often be done with a Durable Power of Attorney, even though the nursing home resident is not competent to sign a deed.

Usually a consultation on protecting the residence comes up when a home owner has an immanent need for Medicaid assistance. Unfortunately there is generally not a lot of advanced planning whereby estate recovery can be avoided by other techniques. These delays in planning come about even though families may suspect neurological problems that will develop over time such as Alzheimers, Parkinsons or other variations.

We recommend planning as far in advance as possible. We have noted that in other states attorneys are facing increasing problems with aggressive estate recovery programs such as have been implemented in Michigan.

Where nursing home care is a prospect for the future, we recommend planning as far in advance as possible in a method consistent with the patient’s overall estate plan.

© 2014 James R. Modrall, III


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