Medicaid Asset Recovery (Michigan)

Guest

This is a "what if" question, since the elderly person does not (yet) get Medicaid. Situation: the senior citizen mother has few assets (Social Security) and a house. The house is held in trust (a living revocable trust, signed 20 years ago) for two adult children. If the mother eventually gets Medicaid (while in a nursing home) and then passes on, can the state of Michigan go after the house? The Michigan Asset Recovery Act is limited to "probated assets", and the estate will not be probated. I see several elderlaw sites online that state that property in trust is non-recoverable, but others say it is...and some even state that the person would not be eligible for Medicare with a house held by a trust!

Niicss · Posted: Thu Nov 13, 2008 4:32 am Post subject:

Hi Alphazip!

As far as I know, in Michigan only those estates that are probated can be recovered (even you have mentioned that). So as the property is already in a trust and will not be probated, then estate recovery will not be initiated by Medicaid.

For further information on estate recovery in Michigan, you can go through this website:
http://www.mplp.org/Resources/mplp_ns_wntr_2008/elder1.htm

Thanks

Guest

Thanks Niicss! I guess my only question now is whether the trust causes any problem with getting Medicaid in the first place. On the app, would she list the house as an asset or say that it's owned by a trust? I wouldn't want to raise any red flags in qualifying.

Guest

Here's what I'm concerned about. The State of Michigan Long Term Care page says:

"A trust may be a sound decision for probate law, but trusts in Medicaid law may make an otherwise exempt asset (like a homestead) countable and will generally not protect otherwise countable assets. Additionally, the lookback period for trusts when figuring divestment and penalties is generally 5 years."

It sounds like having a home in trust will prevent a person from qualifying for Medicaid, so they would have to remove it from the trust to make it exempt.

jameshogg · Posted: Thu Nov 13, 2008 11:06 pm Post subject:

Hi Alphazip!

Yes, there is a concept of look-back period in Medicaid. Transfers of countable assets during the look-back period will lead in a waiting period before you can start to collect Medicaid. If any such transfers have happened in your case or will be happening, then you will have to wait for a longer period of time to get the benefits of medicaid.

Thanks

Guest

94 year old mother in law movedinto our home who needs 24/7 care. Can we use some of her money to expand our home to accommodate her stay and not have to worry about any Medicaid recovery in the event she ever has to collect. She owns no home. Just don't want to move forward and use her money and then be responsible to pay any back after her assests are depleted by Medicaid. At age 94, odds are good that she will end up in a nursing home. Hope you can help me out here in Northern Michigan.

adonis · Posted: Tue May 05, 2009 12:49 am Post subject:

Hi Bob,

I don't think you will be responsible to pay back the money in case of medicaid estate recovery if you use it for your mother-in-law's benefit. However, to be on the safer side, it would be better if you could consult an attorney and take his opinion in this regard.

Thanks

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