Estate Recovery

What is Medicaid Estate Recovery?

When a Nursing Home resident, over the age of 55, who received Medicaid assistance dies, the State of Kentucky is required to recover the money the State has paid for the care of the deceased. Estate Recovery also applies to some other Medicaid recipients. The money is recovered only from the estate of the deceased. This is called Estate Recovery. When a person applies for Medicaid, that person is required to sign a statement acknowledging that Kentucky will recover money from the estate, if possible.

How does Estate Recovery work?

Naturally, most estates of Medicaid recipients have little or no money, since that is one of the eligibility requirements for Medicaid. Therefore, Medicaid Estate Recovery will not recover anything if there is nothing.

Some items are within the sphere of Estate Recovery and some are not. It is important to know the difference.

In Kentucky, there is no Estate Recovery if there is a surviving spouse or a totally disabled adult child, or if the estate is below $10,000. However, the definition of “estate” is much broader that the Probate definition and includes property held jointly with another person, assets in a revocable trust, life estates and other assets owned at the moment before death. For this reason it is important to engage in Medicaid Planning for the surviving spouse of a Medicaid recipient.

It is important to note that if the widowed Community Spouse becomes a Nursing Home resident and Medicaid pays for the widowed spouse’s care, Estate Recovery can look to the home for the money expended for her care only, if she still owns the home at the time of her death.

A elder law attorney will help families through the Estate Recovery process, and enable the families to retain as much of the assets as possible.

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