Michigan recently began its long anticipated “Estate Recovery” program. The program enables the state to seek recovery of the cost of the medical care expenses paid to a person older than 55 years of age, via the state’s Medicaid assistance programs, from their estate’s assets at their death.
Although “Estate Recovery” was first mandated by the federal government in 1993. Michigan became the last state to enact an estate recovery law, which occurred in 2007. Despite the passage of the law, implementation of an estate recovery program was delayed until July 1, 2011.
At present, the state is only allowed to seek recovery against a person’s assets that pass through probate. Many assets do not pass through such as assets held in a living trust, certain jointly held assets and certain assets that pass by way of beneficiary designation. As such, the current “Estate Recovery” allow for people who plan ahead to avoid the impact of this program. In addition, there are other limitations on what the state can seek recovery against, including a certain value of a person’s homestead.
The existence of an estate recovery program does not alter the fact that for eligibility purposes a homestead, a motor vehicle and personal property remain exempt assets. In fact, estate recovery has nothing to do with eligibility. Estate recovery only comes into play when a person who was eligible for Medicaid assistance and who received long term care Medicaid benefits, dies.
In late July, early August, clients who had family members who received Medicaid benefits and have since died, began receiving notices that estate recovery claims would be made against the estates of these deceased family members.
Since Michigan’s estate recovery law is new, it is not exactly clear how it will be implemented. However, the following is known about this program:
Our firm is suggesting that our clients who receive a Notice of Intent to File Claim Against Estate to contact our office immediately upon receipt to request assistance if desired.
Lastly, new legislation has been recently introduced which eliminate the modest protections that now exist in the current estate recovery laws, and impose a more far reaching estate recovery system in Michigan, which could include recovery against jointly owned property, proceeds from life insurance paid to a beneficiary, etc. As these matters develop, we will certainly keep you apprised.