What do Medicaid and probate law have in common? According to the Department of Health & Human Services, Medicaid offers health coverage to various people in need. These include people with disabilities, the elderly, children, families, and low-income people. Back in 1993, a law required every state in the U.S. to implement “Medicaid Estate Recovery”. This program deals with two groups of people who receive Medicaid assistance. The first group is anyone over 55 years old who got Medicaid benefits. The second group includes anyone of any age that is permanently institutionalized and received help from Medicaid.
Heed this warning to those who belong to one of those two groups. State can subject a Medicaid lien to your estate or the estate of your friend or family member. “Death tax” serves as another name for this lien.
Things of Note about Medicaid and Probate:
What Is Medicaid Estate Recovery?
- Governed by state law, Medicaid Estate Recovery directs states to recover tax from the estate of a deceased Medicaid recipient. This money can be assets equal to the value of the Medicaid benefits paid to the recipient during his lifetime. Each state contains its own set of rules regarding the recoverable money from the estate of the deceased recipient.
What Is Probate?
This legal process involves reviewing a will to determine whether it is authentic and valid. It could also mean the administering of a dead person’s will or estate without a will. The court assigns an executed named in the will or administrator if there is no will. This person collects the assets of the deceased in order to pay liabilities like the death tax or Medicaid lien. Afterwards, the executor delivers the assets to beneficiaries named on the will or persons determined by him as beneficiaries.
Federal Law and State Law:
Federal law requires states to recover for Medicaid benefits against assets that should go through probate at a minimum. States can federally attempt Medicaid estate recovery from any assets owned at the time of a person’s death. The laws for probate vary from one state to another. Therefore, you should understand which assets can undergo probate in your state. Property that “undergo” probate in your state are known as probate assets.
Potential beneficiaries should find out if probate is required following a loved one’s death. It takes a long time for executors to finalize the probate process. Furthermore, the executor could spend more time on the distribution of assets depending on how contested or complex the estate is. The simpler the case the faster the settlement will be. The death tax could also assist in making the settlement and probate process longer.
Have questions about Medicaid and Probate law? Contact Alex Neill & Associates for a free, one on one meeting. They can explain how to best protect your family. Neill & Associates are happy to explain the relationship between Medicaid and Probate law in Texas.