As explained yesterday, the NJ State Medicaid Program cannot assert a lien against the Medicaid recipient’s property during his lifetime, unless the individual had wrongfully received benefits and the State sued and obtained a judgment. In all other cases, a lien can only be asserted after the death of a Medicaid beneficiary, and certain conditions must apply: the Medicaid recipient had to have an ownership interest in the asset at the time of death, and there must be no surviving spouse, no surviving child who is blind, disabled or minor, and no surviving sibling co-owner who resides in the premises. 42 USC 1396p(a)(1), N.J.S.A. 30:4D-7.2(a)(1), and N.J.A.C. 10:49-14.1(n)(1). The lien is limited to the lesser of the amount of the services that were provided or the date-of-death value of the individual’s interest in the property. Estate Recovery Medcom
After the death of a married Medicaid beneficiary, there can be estate recovery after the death of their community spouse with respect to assets that were jointly owned by both spouses or were “unavailable assets” that were owned by the Medicaid beneficiary at the time of their death. New Jersey adopted the “expanded estate” definition, so even non-probate assets can be reached if they were still owned by the Medicaid beneficiary at the time of death – jointly held assets and assets with beneficiary designations on them are the main types. So for instance if a person is incapacitated and has no power of attorney in place, he may begin receiving benefits because all of his assets are inaccessible. If he then dies, there will be a Medicaid lien against the estate unless the exceptions above apply to the situation.
Careful planning can prevent a crisis, and careful planning can avoid the imposition of a Medicaid lien.
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