New York State may now seek to recover for Medicaid paid during the Medicaid recipient’s lifetime against the following assets of the deceased Medicaid recipient:
- Joint Assets and Assets Passing by Survivorship
- Retained Life Estates
- Revocable Trusts
- Certain Irrevocable Trusts – i.e., undistributed income
Please note that there is no grandfather provision so the new rules apply to all Medicaid recipients who die after September 7, 2011. It is not relevant when the planning was done, such as the deed transfer ten years ago that included a retained life estate.
Examples of Expanded Medicaid Estate Recovery are:
Medicaid recipient has a joint bank account with his daughter with $10,000 in it that passes to the daughter upon the Medicaid recipient’s demise. The entire $10,000 is subject to Medicaid estate recovery unless it can be shown the daughter put her own money in the account.
Medicaid recipient has an “in trust for” account with his son with $7,000 in it that passes to the son upon the Medicaid recipient’s demise. The entire $7,000 is subject to Medicaid estate recovery unless it can be shown the son put her own money in the account.
Medicaid recipient transferred his home in 1999 to his children and retained a life estate. The recovery will be limited to the value of the life estate interest immediately prior to date of death. If the home is worth $500,000 and the Medicaid recipient was 75 at this of his demise, then the Medicaid estate recovery could be up to $260,745. The amount is determined by the age of Medicaid recipient at the time he passes away.
Medicaid recipient transferred his assets in 2000 totaling $150,000 and retained the right to receive the income, but none of the income has been paid out to him (in the amount of $37,500) prior to his going on Medicaid in 2005. Hence, NYS can recover up to $37,500 in this example.
All seniors should seek the counsel of an Elder Law attorney immediately to review their long term care plan in light of these new regulations. Further action may have to be taken to protect the home if a life estate was retained or if the home was transferred to a Trust.
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