Preventing Medicaid Estate Recovery

William M. Gatesman is assisting a client with the probate of her mother’s estate.  Mother died after she received Medicaid benefits for her care in a nursing home.  The estate owns valuable real property, which was mother’s home property.

The Maryland Medicaid authorities have filed a substantial claim in the estate for many tens of thousands of dollars to recover the Medicaid benefits the State paid on mother’s behalf, which claim is allowed by law.  Mother’s will divides her property among her three children, one of whom is disabled and receives Social Security Disability benefits.

The Medicaid rules provide that the State may not make a claim against the estate of a deceased Medicaid applicant if such person is survived by a disabled child.  It does not matter that other children who are not disabled will also receive property under the decedent’s Will.  However, this is not automatic, and the Personal Representative of the Medicaid recipient’s probate estate must formally disallow the State’s claim and then provide convincing evidence that the estate qualifies for this special rule that disallows a Medicaid claim in the estate.

Mr. Gatesman has been successful in getting the Medicaid claim dismissed in this circumstance.

Another, often overlooked rule also allows for the preservation of substantial assets by negating a claim by Medicaid after a Medicaid recipient dies.  The Medicaid rules allow a person who gets Medicaid benefits for nursing home care to keep his or her house, but the State will put a lien on the house owned by the Medicaid recipient.  However, under the Medicaid rules, any such lien will be negated if the individual returns home and ceases to receive Medicaid benefits before death.

Therefore, if, rather than dying in a nursing home, the costs of which are being paid for by Medicaid, the individual returns home for hospice care before dying, it may be possible that the State’s ability to assert its lien will be abolished.

William M. Gatesman is well versed in these and other strategies to preserve assets that  otherwise might be lost to a Medicaid claim in a probate estate.

Another important rule that family members of a deceased Medicaid recipient should keep in mind is this.  While probate law in Maryland places a time limit during which a creditor of a decedent may make a claim in a deceased person’s estate, there is a special rule that gives Medicaid greater leeway in making a claim and there even is a rule that will give a Medicaid claim higher priority for payment over other estate claims in certain circumstances.

In general, a claim in an estate is barred if not properly presented by the claimant within six months following the decedent’s death.  The State Medicaid administration, however, may make a claim within six months following the appointment of the Personal Representative of the estate, even if such time is more than six months after the date of death.

Also, State claims for reimbursement of Medicaid benefits paid for certain state hospital costs have a higher priority for payment than other claims in an estate.  If a Personal Representative disregards this rule where there are insufficient assets to pay all the estate creditors (as is generally the case in an estate of a deceased Medicaid recipient), then improper payment of claims could result in the Personal Representative incurring personal liability for any shortfall in the payment of the State’s Medicaid claim.

William M. Gatesman is well versed in these special rules affecting the estates of deceased Medicaid recipients and he can assist you and your family in navigating the hazardous waters of administering an estate of a deceased person who received Medicaid benefits during lifetime.