Medicaid Asset Recovery (Michigan)

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This is a "what if" question, since the elderly person does not (yet) get Medicaid. Situation: the senior citizen mother has few assets (Social Security) and a house. The house is held in trust (a living revocable trust, signed 20 years ago) for two adult children. If the mother eventually gets Medicaid (while in a nursing home) and then passes on, can the state of Michigan go after the house? The Michigan Asset Recovery Act is limited to "probated assets", and the estate will not be probated. I see several elderlaw sites online that state that property in trust is non-recoverable, but others say it is...and some even state that the person would not be eligible for Medicare with a house held by a trust!

Niicss · Posted: Thu Nov 13, 2008 4:32 am Post subject:

Hi Alphazip!

As far as I know, in Michigan only those estates that are probated can be recovered (even you have mentioned that). So as the property is already in a trust and will not be probated, then estate recovery will not be initiated by Medicaid.

For further information on estate recovery in Michigan, you can go through this website:
http://www.mplp.org/Resources/mplp_ns_wntr_2008/elder1.htm

Thanks

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Thanks Niicss! I guess my only question now is whether the trust causes any problem with getting Medicaid in the first place. On the app, would she list the house as an asset or say that it's owned by a trust? I wouldn't want to raise any red flags in qualifying.

Guest 0.10 Dollars($)

Here's what I'm concerned about. The State of Michigan Long Term Care page says:

"A trust may be a sound decision for probate law, but trusts in Medicaid law may make an otherwise exempt asset (like a homestead) countable and will generally not protect otherwise countable assets. Additionally, the lookback period for trusts when figuring divestment and penalties is generally 5 years."

It sounds like having a home in trust will prevent a person from qualifying for Medicaid, so they would have to remove it from the trust to make it exempt.

jameshogg · Posted: Thu Nov 13, 2008 11:06 pm Post subject:

Hi Alphazip!

Yes, there is a concept of look-back period in Medicaid. Transfers of countable assets during the look-back period will lead in a waiting period before you can start to collect Medicaid. If any such transfers have happened in your case or will be happening, then you will have to wait for a longer period of time to get the benefits of medicaid.

Thanks

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