Often during our estate planning consultations, clients wonder … What does Medicaid have to do with Probate?
Well the short answer is a lot. First off, medicaid is a state and federal funded service to provide healthcare to low income individuals. Basically, a person must qualify for Medicaid benefits and once they are qualified, then they receive the benefits until their death. Now if someone is truly “low income” then most of the time they don’t have any assets to go through Probate. And there’s nothing to worry about.
But some people who are on Medicaid have lived a good life and accumulated a significant amount of wealth. And when they pass away, the Probate Court gets involved to make sure the department of Medicaid was reimbursed. In other words, the Probate Court ensures that Medicaid is reimbursed for any payments that were made.
As a result, when someone passes away, we must notify the Department of Medicaid to see if they will make a claim against the Estate. In some instances there will not be a claim, while for others there will be. A claim against the estate is where someone seeks to be reimbursed out of the deceased person’s assets. Often times, when Medicaid makes a claim, they want to be reimbursed for the benefits that were paid out. In the event, that someone doesn’t have the ability to pay (most of the time), Medicaid will place a lien on the property to ensure that they get reimbursed. And in most instances, the Probate Court will allow the property to be transferred and the lien placed upon it.
There are some exceptions to medicaid being reimbursed with real property. The first is due to minor children or a disabled adult as a person living with the deceased. The second option to make a hardship exemption request. There are very specific deadlines related to the hardship exemption.
If you’re unsure if Medicaid will try to recover against your estate, give us a call at 740-346-2899.