Although certain assets such as a home, car, mineral rights (subject to limitations) and businesses essential for self-support are “non-countable” when applying for long-term care Medicaid, there are numerous exceptions to avoid a successful claim by the State to be paid back for benefits (such as nursing home care costs and medications) advanced. Some of the exceptions are as follows:

  1. Surviving spouse. No matter whether the resources are countable or not, once the state finds out there is a surviving spouse it will not pursue estate recovery.
  2. Surviving child or children under age 21. If the long-term care Medicaid recipient received benefits after age 55 and had surviving children under 21, the state will not pursue a claim. Birth certificates and driver’s license should be satisfactory evidence.
  3. Surviving child at any age who is blind or disabled. A letter from the Social Security Administration proving the child is receiving either Social Security Disability Income or Supplemental Security Income is usually all that is needed.
  4. Unmarried adult continuously residing in the decedent’s homestead for at least one year prior to the time of the Medicaid recipient’s death. The most recent tax return, utility bills, proof of employer records such as a W-2 showing address of the child and confirmation by the county records that the child is unmarried is generally sufficient evidence.
  5. Value of resources are less than $10,000. If you show the excluded resources are less than $10,000 or if the amount paid by the state is less than $3,000, then it is deemed uneconomical for the state to pursue the claim.
  6. Resources that pass by beneficiary designation or other assets that pass outside of probate and not by Will or intestacy. Some examples are as follows:
    1. Ladybird Deeds(Enhanced Life Estate Deeds) – typically used to transfer the homestead at the death of the Medicaid recipient;
    2. Life Estate Deeds– similar to Ladybird deeds but the grantees have a remainder interest at the time the deed was signed so generally the deed would have been signed before the five year look-back period (otherwise there would be a transfer penalty).
    3. Transfer on Death Deeds– another type of deed that typically passes the homestead after the death of the Medicaid recipient.
    4. Beneficiary Designation on other Non-Countable Resources– examples include term life insurance policies, whole life insurance policies that have a face value of $1,500 or less, IRAs, etc.
  1. Undue Hardship Waivers
    1. If the tax appraisal district value of the home is $100,000 or less and one or more of the siblings or direct descendants who would inherit the home has gross family income below 300% of the Federal Poverty Level, then for those who fit that criteria, estate recovery would be avoided as to their share. If the tax appraisal district’s value of the homestead exceeds $100,000, then only the excess over $100,000 is subject to estate recovery if the heir meets the qualifications set forth above.
    2. If the estate property is the site of the operation of a family business, farm or ranch at that location for at least 12 months prior to the death of the Medicaid recipient and is the primary source of income (more than 50% of their livelihood) of the heirs or legatees which would result in loss of their primary source of income, then estate recovery could be avoided.

If you are interested in learning more, please sign up to attend our free “Estate Planning Essentials” workshop on Saturday, February 2, 2019 at 10:00 a.m. or Thursday, February 28, 2019 at 1:00 p.m. or attending our “Facebook Live Event” on Saturday, February 9, 2019 at 10:00 a.m. by calling (214) 720-0102 or signing up online at www.dallaselderlawyer.com.   

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