Michigan Adopts Estate Recovery

 

On September 30, 2007, Governor Granholm signed into law the Michigan Medicaid Estate Recovery Program. Michigan now joins the rest of the 49 states by enacting an estate recovery program. Estate recovery was mandated by Federal Medicaid rules, although Michigan was the last rebel to ignore the Federal mandate.

 

Estate recovery is a program to allow the state to seek reimbursement of Medicaid dollars spent on a recipient after the recipient dies. Generally, persons on Medicaid are impoverished and have less than $2,000.00 in assets, excluding a house and a certain amount to the spouse, if any, living at home. Estate recovery is aimed at recovering Medicaid dollars from the equity in the home after the recipient and spouse dies.

 

Michigan Medicaid Estate Recovery Bill directs estate recovery only against the probate estate of the recipient, and possibly, the recipient's spouse. With proper planning, a probate estate can be avoided with beneficiary designations and "ladybird deeds."

 

Exceptions to estate recovery are also written in the Bill. The house is exempt from estate recovery if a spouse, minor child, disabled child, "care-taker relative" or sibling owner resides in the house. Further, homes that are less than the average price of a home in the county are also exempt from estate recovery. Other exceptions include situations that would cause a hardship (but there is no indication of what constitutes a hardship) and property that is the primary income-producing asset of the survivors, such as a family farm or business. The estate recovery law is expected to take effect December 1, 2007. Estate recovery will apply only to Medicaid recipients who begin receiving Medicaid benefits after the Bill is enacted.

 

For more information on estate recovery, contact Diane Kuhn Huff at the law office of John A. Scott P.C.