Medicaid Estate Recovery

Medicaid “Estate Recovery” is the name used to describe a claim Medicaid programs make on the estate of a deceased Medicaid recipient. Federal law requires these claims at 42 U.S.C. § 1396p(b). In general terms, the State keeps a running tab of all amounts paid for a long-term care Medicaid recipient. After the recipient dies, the State presents a claim to his or her estate. Federal law gives States the option to limit the claim to the probate estate or to expand the claim to include “any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.” 42 U.S.C. § 1396p(b)(4).

In general terms, estate recovery cannot be pursued until the recipient’s death and the death of his or her spouse. It is limited to the recipient’s “estate” although States have the option to use a probate-only model or expanded estate recovery. It is deferred if certain relatives reside in the home. It is further limited to individuals who received Medicaid and were 55 years of age or older when the individual received such medical assistance, the State shall seek adjustment or recovery from the individual’s estate, but only for medical assistance consisting of— (i) nursing facility services, home and community-based services, and related hospital and prescription drug services, or (ii) at the option of the State, any items or services under the State plan (but not including medical assistance for Medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title). In States where there is a long-term care partnership and the recipient purchased a qualifying long-term care insurance policy, there is usually an estate recovery exemption equal to the amount of insurance proceeds paid by the policy.

Another often overlooked concept that you will likely need a lawyer to help you parse is this: Medicaid does not alter rights created in other laws such as property rights and contract rights, so there may be other laws that limit estate recovery.


IRS says “Wait a Minute” on Stepping-up Basis for Assets in Irrevocable Trust

Until recently, the IRS has said little (if anything) regarding whether assets the beneficiary of an irrevocable trust receives get a step up in basis following the Grantor’s death. With issuance of Revenue Ruling 2023-2, that has changed. The IRS has spoken. In RR 2023-2, the IRS posed the following hypothetical which I’ve edited slightly: […]

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Should I remove the Nursing Home spouse’s name from accounts when there is a Community Spouse?

When applying for Medicaid, the nursing home spouse (called the Institutionalized Spouse) is often a joint owner (or sole owner) on checking, savings and other acounts. Should those resource be taken out of the name of the Institutionalized Spouse? The answer is generally “yes,” but it requires some context and some qualifications. The context and […]

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Practical Considerations when Preparing Medicaid Applications

If you agree to file a client’s Medicaid application as part of your representation, here are a few practical considerations. Keep in mind, these suggestions are how we handle matters in our office. If you have a different approach, that’s fine. If you have suggestions on other ways to approach applications, we’d love to hear […]


Can the State Take Grandma’s Home After She Dies? What is Medicaid Estate Recovery?

Medicaid’s estate recovery claim is essentially a creditor’s claim allowing the State to recover medical assistance paid on behalf of recipients of long-term care Medicaid. Authority for the claim is found at 42 U.S.C. § 1396p(b). The claim is limited to the applicant’s estate, although State laws vary regarding what the estate looks like. As shown […]


Oregon’s Expanded Medicaid Estate Recovery Pulls Home Back Into Estate

In Department of Human Services v. Hobart, the Oregon Court of Appeals ruled, on March 2, 2022, that Oregon’s Medicaid agency could pull a Medicaid recipient’s interest in a marital home back into her estate for purposes of estate recovery. The federal Medicaid law requires States to pursue estate recovery, but some States are more […]


News Roundup – 3/4/2022

We regularly post links to news articles and other resources that might be of interest to our viewers. We focus on general news, health and healthcare news, special needs news, events, government sources, financial and retirement news and legal news. Only headlines are listed so you can use this page like a newspaper, reading only […]

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Tenncare Notices

The following notices are routinely included with other correspondence from Tenncare. Below are Tenncare’s notices regarding: (1) Estate Recovery, (2) Qualified Income Trusts, and (3) Reporting changes to Tenncare.

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Georgia Medicaid Estate Recovery Changes

As of December 21, 2021, Georgia has changed its Estate Recovery Program rules under Title 49 O.C.G.A. § 49-4-147.1. This change is effective July as of July 1, 2018.

Divorce as a Medicaid Planning Option

Divorce is one of the most aggressive Medicaid planning tools. Divorce should not be approached lightly and should not be attempted without an attorney. Most Medicaid plans can be completed without the necessity of divorce. Even when divorce appears to be the answer, a simpler procedure, commonly known as a “Catholic divorce” (e.g., an action […]

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Tenncare Estate Recovery, New Statute of Limitations

TCA 30-2-310 was amended effective April 7, 2021. Tennessee Code Annotated, Section 30-2-310, is amended by adding the following as new subsection (c): (c) Notwithstanding subsections (a) and (b), § 71-5-116, and §§ 30-2-306 – 30-2-309: (1) If the bureau of TennCare receives a notice to creditors as defined in § 30-2-306(b) within twelve (12) […]

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