Medicaid estate recovery liens often take people by surprise

On March 24th, PBS news hour had a segment called “The Medicaid Bill that doesn’t go away when you die.” The program described the impact of estate recovery liens which are pursued by State Medicaid Programs. Estate recovery is required by federal law in 42 USC 1396p. The New Jersey  lien statute is at N.J.S.A. 30:4D-7.2(a)(2). The lien is imposed after death against property that was owned by a Medicaid recipient at the time of his death. Congress allows States to go after not just the solely-owned “probate assets,” but any asset in which the Medicaid recipient held any legal or equitable title at time of death, such as jointly-held assets that otherwise pass to a surviving co-owner. this is called the “expanded estate.”

We just handled an estate of someone.  who died many years ago owning a property that just never got sold until 2014. Her many heirs were hopeful for some inheritance. We contacted the State Medicaid office, as the Executor had no idea whether the deceased had been on Medicaid or not.  It turned out she had received Medicaid benefits after age 55 which, in the last year alone, exceeded the total value of the property that remained in her estate. The lien  recovers for ALL Medicaid services provided after age 55.

Careful planning can avoid Medicaid liens, but failure to plan could be a recipe for the heirs’ losses later.

Call us for advice and representation concerning Medicaid issues, applications and appeals … 732-382-6070

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2 thoughts on “Medicaid estate recovery liens often take people by surprise

  1. We have received the letter for Medicaid estate recovery wanting over 45,000 dollars for my mother in law’s half of the family home. Can we require Medicaid to pay for an actual appraisal instead of using the one on file with the auditor or do we have to pay for it?

  2. 2 years ago State of NJ Medicaid (DMAHS) put an estate recovery lien on my late Mom’s house. They are NOT making me sell the house, the lien just sits there. The question is – does this lien collect any annual interest? I.e. if the lien is for let’s say 30k, is it 30k or 30k plus interest?

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