Posted by: BlogMaster | December 1, 2011

Update on Expanded Medicaid Recovery

On September 26, 2011, New York State issued its administrative explanation (called an ADM) and regulations on the expanded recovery against deceased Medicaid recipients and their spouses. This ADM came nearly six months after Governor Andrew Cuomo and the NYS Legislature passed sweeping proposals to alter Medicaid and implement cost savings measures on April 1, 2011. 

One of those measures expands “estate recovery” beyond estates in probate (dying with a will) or intestacy (dying without a will). Expanded recovery for Medicaid benefits will now be against:

  • Jointly owned assets between a Medicaid recipient and a spouse or other third party such as joint bank or financial accounts or in trust for a designated beneficiary;
  • Real estate owned as tenants in common or jointly; and
  • Real property deeds with retained life estates owned by the Medicaid recipient or their spouse.

Revocable Living Trusts – another way for spouses of Medicaid recipients to avoid probate estate recovery and thus avoid Medicaid claims – are no longer a viable Medicaid planning tool to prevent recovery once the recipient or the spouse die.

The ADM and regulations appear to be effective for recoveries made on or after September 8, 2011.  The most troubling aspect of the new regulations is that NYS is expected to file claims against life estate deeds which pre-date the effective date of the regulations.

My next blog will discuss Life Estate deeds and expanded recovery. 

Future blogs will discuss other recovery issues, the importance of irrevocable living trusts, and deferral and waiver of recovery.

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