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Estate Recovery and the Home

Posted by Andrew Byers | Aug 16, 2011 | 0 Comments

Michigan's new estate recovery law will most likely affect the home.  The reason for this is the home is the major non-countable asset a nursing home resident can own while qualifying for Medicaid nursing home benefits.  However, the state will not seek to recover against the home in some circumstances.

First, if the nursing home resident is married and their spouse, called the community spouse is living in the home, estate recovery will not apply.  However, the community souse may still want to consider planning to avoid estate recovery for the following reasons.  First, the community spouse may die before the nursing home spouse.  In many cases, the nursing home spouse would then inherit or otherwise solely own the house again, causing it to be subject to estate recovery.  Second, the community spouse may need nursing home care themselves someday.  In that case, estate recovery would be pursued against the home based on their receipt of Medicaid.

It's a shame when taxpayers have to pay for these programs all their working lives and then, when it comes time to use them, the state now may seek to recover against their home. 

In addition, the State of Michigan will not seek to recover assets from the home of a Medicaid recipient while one of the following other individuals is actually residing in that home:

  • a Medicaid recipient's child who is less than 21 years old.
  • a Medicaid recipient's child who is blind or permanently disabled. 
  • a survivor who lived in the home and provided care that allowed the Medicaid recipient to remain in their home for at least two years immediately prior to the Medicaid recipient's admission into a medical facility. 
  • a Medicaid recipient's sibling who has an equity interest in the home and who lived in the home for at least one year immediately prior to the Medicaid recipient's admission into a medical facility. 

The estate recovery program also addresses not pursuing estate recovery based on the issue of "undue hardship."  A future post will discuss the application of undue hardship.

About the Author

Andrew Byers

Andrew Byers' elder law practice focuses on the legal needs of older clients and their families, and works with a variety of legal tools and techniques to meet the goals and objectives of the older client. Under this holistic approach, I handle estate and longevity planning issues and counsel cli...

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