Many people who apply for assistance to pay for nursing home care ask this question. For many, the home constitutes much or most of their life savings. Often, it’s the main asset that a person has to pass on to his or her children.
The home is currently an exempt asset which means it is not taken into account when calculating Medicaid eligibility. However, in 1993 Congress passed a law that affects hundreds and thousands of families and loved ones who receive Medicaid assistance to pay for a nursing home. The law requires states to recover the value of the Medicaid payments made to nursing home residents. This is known as Estate Recovery.
Estate Recovery does not take place until the recipient of Medicaid benefits dies. Then, federal law requires that states attempt to recover the Medicaid benefits paid. Michigan enacted estate recovery legislation in September 2007 and began enforcing the law in 2011.
Any assets that go through the probate court after a Medicaid recipient’s death are subject to Estate Recovery. There are ways to protect probate assets such as a living trust or a life estate deed. In order to find out the best way to protect your assets from Estate Recovery, you should contact an experienced elder law attorney.