Long Island Elder Law & Estate Planning

Long Island Medicaid planning attorneys

Failing to include Medicaid planning in your estate plan can put assets at risk if you need to qualify for Medicaid down the road. What you may not realize, however, is that your assets might still be at risk after you are gone.  To help ensure that your assets are safe, the Long Island Medicaid planning attorneys at Eghrari Law Firm explain what you need to know about the New York Medicaid Estate Recovery Program.

What Is the Medicaid Estate Recovery Program?

The Medicaid Estate Recovery Program, or MERP, program is basically the government’s way of trying to get reimbursed for money it spends on participants in the Medicaid program. Some states may collect on any asset, whether it was required to be administered through probate or not.  This is called “expanded recovery.”  New York’s MERP rules limit recovery to those assets that pass through the probate estate of a Medicaid recipient. If Medicaid is helping to cover your LTC costs while you are alive, the State of New York can try and get some of that money back from your estate when you die. Nevertheless, Medicaid estate recoveries are prohibited:

  • during the lifetime of the surviving spouse, or at any time when the recipient has a surviving child who is under age 21 or is certified blind or certified disabled; this prohibition applies to all assets covered by the expanded definition of estate, including assets that pass directly upon the decedent’s death to individuals other than a surviving spouse or minor child or blind or disabled child AND
  • with respect to the home of a deceased Medicaid recipient, when one of the following relatives is residing in the home:
    • a sibling with an equity interest in the home who lived in the home for at least one year immediately before the recipient was institutionalized and who has lawfully resided in the home continuously since that time; and
    • an adult child who lived in the home for at least two years immediately before the recipient was institutionalized, who provided care that may have delayed the recipient’s institutionalization, and who has lawfully resided in the home continuously since that time.

Does MERP Always Try to Collect?

The MERP rules also allow for a “hardship waiver” that allows recovery to be waived, in whole or in part, if it will result in “undue hardship” to the heir, survivor or beneficiary of your estate. For example, undue hardship may exist when the asset subject to recovery is the sole income-producing asset of the beneficiary, such as a family farm or family business and income produced by the asset is limited or when the asset is real property of modest value (i.e. having a value no higher than 50 percent or the average selling price in the county where the home is located, as of the date of your death) and the home is the primary residence of the beneficiary. The beneficiary or representative of your estate must request a consideration of undue hardship within 30 days of the notification of the Medicaid estate claim.

Can MERP Put a Lien on Real Property?

A post death lien will be placed on real property to the extent of your interest in the property at the time of death, unless recovery is deferred or waived under the conditions described above. Although a lien is placed on the real property, recovery against the property may also be deferred if all the following apply:

  • An heir or survivor has lawfully and continuously resided in the home, beginning prior to your death, and is unwilling to sell the property.
  • The Medicaid claim cannot be paid in full unless the property is sold.
  • The heir or survivor demonstrates the inability to obtain financing to pay the estate claim.
  • The heir or survivor enters into a written agreement with the Medicaid program to pay the amount of the claim in accordance with a reasonable payment schedule, subject to reasonable interest.

Contact Long Island Medicaid Planning Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the MERP program or Medicaid planning, contact the Long Island Medicaid planning attorneys at Eghrari Law Firm by calling us at 631-265-0599 to schedule your appointment.

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About Eghrari Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill Read More!