ElderLaw News-The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News
ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President., William S. Fralin, Esq., President.

Exceptions to Medicaid Estate Recovery

A large number of clients worry about the consequences of utilizing Medicaid to pay for long-term care.

Most importantly, they have received information from non-legal professionals that Medicaid will take their home or that the spouse will be impoverished. The good news is that with proper planning your entire estate may be free from estate recovery.

When an individual age 55 or older dies, states are required to seek recovery of payments from the individual’s estate. Since the assets of an individual must have countable assets valued below $2,000, collectability is often an issue. Good planning and inherent exceptions to estate recovery further complicate recovery.

Some estates will be exempt from Medicaid estate recovery. The most common exemption is the existence of dependents. The state is prohibited from initiating estate recovery if a spouse, a child under age 21, or a disabled child survives the beneficiary.

Another exception to Medicaid estate recovery exists when recovery would cause an undue hardship on the heirs. Undue hardships include cases where the survivors make a living from the asset, such as a family farm or other family business, when assets are illiquid, when a home is of modest value, or when recovery would not be cost effective.

Additional exemptions may also apply depending on what type of planning was done. For example, savings bonds, which are governed by the regulations imposed by the U.S. Treasury, may be exempt from estate recovery under certain circumstances. Additionally, real property for which the recipient held a life estate, or real property that was transferred out of the recipient’s name, would not be included in the estate, and therefore would not be subject to estate recovery.

While not all estates will be completely exempt from Medicaid estate recovery, knowing what will happen to your estate by planning - to minimize potential consequences both during lifetime and after death - is imperative. The staff of The Estate Planning & Elder Law Firm not only help address a family’s concerns related to the potential risk of losing assets, but also help families assess other consequences, such as the tax implications of transferring a home or a low-basis investment.


If you are interested in having an Elder Law attorney from The Estate Planning & Elder Law Firm, P.C. speak at an event, then please call us at:

Maryland (301) 214-2229
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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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The Estate Planning & Elder Law Firm, P.C. encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to The Estate Planning & Elder Law Firm, P.C. If you are interested in a free subscription to the Elder Law News, then please e-mail us at office@chroniccareadvocacy.com, telephone us at (703) 243-3200, or fax us at 703-841-9102.

This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

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