Medicaid is a federal program that aims to provide low-income individuals and families with basic medical care. As such, there are stringent qualification requirements for people who wish to receive benefits under the program. Likewise, because of the extensive cost of the Medicaid program to the federal government and the states, each state is required under the federal law to recoup the costs associated with the medical care of Medicaid recipients after the Medicaid participant passes away. According to the Department of Health and Human Services1 (HHS), in order for a state to receive reimbursements for Medicaid recipients, the state is required to pursue recovery for the costs associated nursing home or long-term institutional care, home and community-based services, prescriptions drugs and hospital care while a person is a resident of a nursing home or home or community-based services, and any other costs, at the option of the state.
Despite the requirement that a state receiving Medicaid reimbursement must attempt to recover assets, each state individually defines the recovery process and rules. Some states may collect on any asset, whether or not it was required to be administered through probate or not. This is called “expanded recovery.” Missouri’s rule limits recovery to those assets that pass through the probate estate of a Medicaid recipient, and some cases in Missouri do limit the recovery to this standard. Further, typically the only asset that a Medicaid recipient will own of value at the time of their death is their home. This is because the home is exempt from being counted against them for Medicaid eligibility purposes during the application period or during their lifetime, subject to some limitations.
A beneficiary deed can keep real estate out of your estate
A beneficiary deed is a type of real estate deed that automatically transfers real property (land or buildings affixed to land) to a named beneficiary when the owner passes away. When you record a beneficiary deed, the transfer is not immediately effective. That is you have not given up any of your present interests in the home. However, upon your death, the beneficiaries only need to show that you have passed away in order to transfer the title of the home to their name or names. It falls under Missouri’s “non-probate transfer” rules; therefore, this type of transfer is, by definition, not administered within the probate estate of the person who gifted the property at their death. While it may seem that using a beneficiary deed to transfer real estate to your family members would make it unreachable in a Medicaid recovery action, a 2009 decision2 by the Missouri Court of Appeals actually allows the state to pursue real estate transferred through a beneficiary deed when it is pursuing reimbursement for costs associated with Medicaid-based medical care. The state successfully argued that they were a creditor that had a right to force the home back into the probate estate for the purpose of collecting against the sales proceeds.
While a beneficiary deed may not be an effective way to protect your home from Medicaid recovery in Missouri, attorneys practicing in the area of Medicaid law can advise of many alternatives prior to submitting a Medicaid application to protect your assets. Depending on whether you are married or single, and considering other assets you own, and the timing of your need for skilled nursing, a plan can be devised to preserve some or all of your assets prior to submitting a Medicaid application. It is important to discuss your situation with an attorney as soon as possible if you are facing long-term care in a facility, or you want to protect your assets from the possibility of later needing skilled nursing care
Contact a St. Louis medicaid planning attorney today to schedule a case evaluation
Medicaid recovery actions can have a significant impact on the overall value of the estate you leave your family. Consequently, it is important for anyone who is facing possible long-term care placement in a facility to talk to an attorney about their options for protecting their assets. To schedule a consultation with St. Louis medicaid lawyer Melissa Q. Leavy, call our office today at 314-932-5573 or send us an email through our online contact form.