How New York’s Medicaid recovery program affects your estate

On Behalf of | Jan 22, 2021 | Estate Planning |

Some people need Medicaid even though they might have few assets in their name. Although qualifying for Medicaid as an older adult usually means needing to spend everything you already have on care, you can qualify for benefits even if you own a valuable home.

Your primary residence doesn’t prevent you from getting the benefits you need. Unfortunately, while you may dream of passing that home on for your children to live in or to sell off for an inheritance, the estate recovery program for New York Medicaid could put an end to those plans. How does the estate recovery program work?

The state can claim your home for benefit repayment

When you die, New York will try to recover as much as possible from your estate for the benefits that they have paid out since you turned 55 or entered an assisted living facility. Medicaid recovery can involve seizing liquid assets like bank accounts and other valuable financial holdings. The state can also take a lien against a property or even order its sale.

Securing a lien against your home during the estate administration process ensures that your executor has to pay for all of the care you received before passing along property to your family members and loved ones. The state can even seek recovery from people who received assets from your estate in some cases.

Some situations prevent the state from taking action

Although Medicaid recovery programs don’t care if they completely consume the inheritance of your children, they won’t take action against your residence if there are still people who depend on it. Surviving dependent spouses, blind or disabled children, and minor children all qualify for deferred recovery against the home where they live.

The state will delay estate recovery if you shared your home with a sibling who has joint ownership rights. Delayed recovery is also possible if your adult child lived in the home for at least two years before you needed inpatient care.

Early planning can protect your assets and legacy

Planning ahead to qualify for Medicaid can also protect your assets in the future. Asset protection planning might involve moving the house into a trust or otherwise changing who holds title and how to keep creditors like Medicaid from coming after your real property when you die.

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