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My grandmother taught me how to play poker. Today, I wish more time was dedicated to teaching me how to cook like her instead of learning about straight flushes. Instead, I was schooled in the art of 5-card draw. Each and every hand, my sweet, tiny grandma wiped the floor with me. It was an undisputable fact that she and her 3 sisters were card sharks. Even the grand dame of the family, my Great Aunt Minnie, whipped out a deck of cards when I came to visit and beat me soundly. No money was sacrificed in any of these contests – only poker chips, but it was difficult to limit my sore loser tendencies. Eventually, I got better. Wins and losses were more evenly distributed. Success only happened through learning and practice. This is what is happening with Medicaid.
For years, Medicaid did not adequately utilize their estate recovery tools once a Medicaid recipient passed away. Governmental entitlements such as Medicaid will provide payment for care services , but they have the right to recoup money that was paid out. Medicaid liens against property are one example of a recoupment action. Estate recovery is a Medicaid creditor filing against a Probate Estate or Administration where estate assets are available. A creditor has 7 months from the date Letters Testamentary or Letters of Appointment for an Estate are first issued to file a claim. Timely claims must be addressed by the estate representative or they are on the hook personally. Claims may still be filed after 7 months, but an estate representative’s liability is more limited.
Over the last few years, the State of New York has contracted with a Texas company to send out estate recovery questionnaires and ultimately file estate claims. Estate recoveries are no longer a rare occurrence.
So, how do we plan for this? Financial eligibility for Medicaid usually involves legal transfers of assets. These transfers are approved and accepted by Medicaid. Transfers can be made to individuals or Trusts. Factors such as asset class, family dynamics, age and illness types will determine the type of Medicaid Planning. It is the loose ends – random small bank accounts, a few shares of stock or unclaimed funds solely in the Medicaid recipient’s name which may have had no impact on the Medicaid Planning, but are Probate Assets. These estate assets would potentially be available for an estate recovery. It requires more work from the adult children and spouses to discover these assets and transfer them prior to a Medicaid filing.
What was once just a trickle is now a steady rain. Planning has to adapt to the changing landscape. New York State has learned its lessons. Now it is time for us to deal an ace from the deck. For more planning tips, contact the professionals at The Feller Group, P.C.
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