A Guide to Medicaid Estate Recovery

Medicaid estate recovery is a process where the state seeks to recover costs for long-term care services provided to a Medicaid recipient after they pass away. For many, Medicaid helps cover nursing home or assisted living expenses, but few realize that the state may claim part of their estate to recoup those costs. This process applies to individuals 55 or older who used Medicaid for long-term care services. Understanding how Medicaid estate recovery works is crucial for anyone relying on Medicaid for healthcare, especially in Michigan.

How Does Medicaid Estate Recovery Work in Michigan?

In Michigan, the Medicaid estate recovery program allows the state to recover funds from a deceased Medicaid recipient’s probate estate. After the recipient passes, if any of their assets goes through probate—a legal process to distribute their assets, the state may be able to claim some of the estate assets to recover the cost of the care it provided.

This recovery applies only against assets that pass through probate. If a surviving spouse or minor or disabled child still lives in the home, recovery may be delayed. 

What Assets Are at Risk?

Not all assets are subject to Medicaid estate recovery. Only assets that pass through probate (like a home, car, or other property in the deceased’s name) are at risk. However, assets held in a properly structured trust, real property transferred via a Ladybird type deed, or jointly owned property with the right of survivorship may be protected. For instance, if a home is jointly owned with a spouse, it may avoid recovery entirely.

Still, figuring out which assets are subject to recovery and which are protected can be tricky. Getting legal guidance can help ensure you’re not leaving your loved ones with unexpected claims on their inheritance.

Can You Avoid Medicaid Estate Recovery?

While Medicaid estate recovery is mandatory, there are ways to protect your estate. Estate planning strategies (such as creating a Medicaid asset protection trust, transferring property before applying for Medicaid, or restructuring ownership of assets) can reduce the amount the state can claim, or prevent it from happening at all.  However, these tactics must be handled carefully with the help of a skilled estate planning attorney to avoid penalties or disqualification from benefits.

Because Medicaid rules are complex and constantly evolving, working with a knowledgeable attorney is crucial. A knowledgeable estate planning team can help you navigate Medicaid’s rules, protect your assets, and ensure your estate goes to your intended beneficiaries.

Why Is Legal Help Necessary for Medicaid Estate Recovery?

The Medicaid estate recovery process can be confusing and overwhelming, especially for families already dealing with the loss of a loved one. Our experienced legal group can help guide you through the complexities of Medicaid recovery, explain how it might impact your estate, and help you take steps to protect your assets.

Our firm specializes in estate planning, elder law, and Medicaid planning and can offer advice on structuring your assets to avoid probate or minimize what Medicaid can recover. We can also help you apply for Medicaid without jeopardizing your estate. Attempting to navigate these issues without experienced guidance can lead to costly mistakes, leaving your family vulnerable to losing a significant portion of their inheritance.

Can Other Resources Help?

While professional legal advice is invaluable, there are additional resources you can use to learn more about Medicaid and estate recovery. The Michigan Department of Health and Human Services (MDHHS) provides detailed information on Medicaid estate recovery. Medicaid.gov also offers federal guidelines on the recovery process. These sources can help clarify the basic rules, but they won’t provide the tailored guidance that our law firm can offer.

Contact Estate Planning & Elder Law Services for Skilled Guidance

If you or a loved one rely on Medicaid or are planning for future long-term care needs, it’s important to understand how Medicaid estate recovery could impact your estate. At Estate Planning & Elder Law Services, we specialize in helping Michigan families protect their assets and plan for the future.
Our experienced attorneys will work with you to develop a personalized plan that shields your estate from unnecessary claims, ensuring your loved ones are cared for.

Don’t wait until it’s too late to safeguard your estate. Schedule a consultation with Estate Planning & Elder Law Services today and let us help you plan for a secure future.