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Question about Medicaid claims on an estate
Old 07-30-2016, 05:44 AM   #1
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Question about Medicaid claims on an estate

My husband is the executor of his uncle's estate. We live in New York. His uncle was on Medicaid for the last several months of his life. After he passed, we found out about an old work 401K he had, with approximately $28,000.

We have received the letter from Medicaid putting in a claim on his money, the bill for his medical expenses comes to about $78,000.

Question if anyone knows: is Medicaid entitled to the entire $28,000, or are you as the Medicaid beneficiary allowed to have a certain amount of money, say $14,000 that you are allowed to keep and still be entitled to Medicaid?

Sorry if that wording is confusing.
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Old 07-30-2016, 06:04 AM   #2
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I'm pretty sure they're entitled to any assets of your uncle.
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Old 07-30-2016, 06:31 AM   #3
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I'm pretty sure they're entitled to any assets of your uncle.
thank you for the quick reply
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Old 07-30-2016, 10:03 AM   #4
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While alive, the Medicaid beneficiary is entitled to keep a small amount of assets. This may vary by state and income level. As you have seen, after the person dies, Medcaid will put a claim against the estate.

Was the uncle married when he died? If so, the rules are more complicated.

I have had to deal with this when my mother died. Since that was in Pa, the exact rules/procedures may be different. In Pa, funeral expenses, legal fees, etc incurred in settling the estate have priority over Medcaid claims. Check with a local attorney. The cost may be modest and you will know that all proper paperwork has been completed.
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Old 07-30-2016, 10:30 AM   #5
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While alive, the Medicaid beneficiary is entitled to keep a small amount of assets. This may vary by state and income level. As you have seen, after the person dies, Medcaid will put a claim against the estate.

Was the uncle married when he died? If so, the rules are more complicated.

I have had to deal with this when my mother died. Since that was in Pa, the exact rules/procedures may be different. In Pa, funeral expenses, legal fees, etc incurred in settling the estate have priority over Medcaid claims. Check with a local attorney. The cost may be modest and you will know that all proper paperwork has been completed.
he was single, never married. Will definitely inquire with our attorney, thanks!
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Old 07-30-2016, 10:58 AM   #6
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Checking with an attorney is the best way to navigate this situation. Might there also be some taxes owed on this money that is in a 401K?
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Old 07-30-2016, 12:00 PM   #7
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I think they take the estate, hook, line and sinker. So I don't think they'd yank the 401k and leave you holding the tax bill.
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Old 07-30-2016, 04:50 PM   #8
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Checking with an attorney is the best way to navigate this situation.
+1 on this. Each state can be different so it is best to talk with a local (to the uncle) elder law attorney.
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Old 07-30-2016, 05:01 PM   #9
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Checking with an attorney is the best way to navigate this situation. Might there also be some taxes owed on this money that is in a 401K?
Im sure there are taxes owed. not sure who gets dibs!
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Old 07-30-2016, 05:02 PM   #10
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I think they take the estate, hook, line and sinker. So I don't think they'd yank the 401k and leave you holding the tax bill.
yeah i'm not sure how this is going to go down
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Old 07-30-2016, 05:03 PM   #11
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+1 on this. Each state can be different so it is best to talk with a local (to the uncle) elder law attorney.
thanks, will definitely check it out with a lawyer.
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Old 07-30-2016, 06:34 PM   #12
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It's not uncommon for elderly parents to set up a 'life estate' to shield their home from being part of any medicaid estate recovery. It involves transferring ownership of their home to someone else, usually the children, but the parents continue to live in the home as long as they live. Definitely want a lawyer involved.
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Old 07-30-2016, 07:33 PM   #13
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Have you gone on Medicaid.gov to see what they say about this subject? It's a place to start.

I use the internet about anything legal as I avoid attorneys like the plague. Beats paying one $150 for looking at the same websites I'd be looking at.
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Old 08-04-2016, 02:21 PM   #14
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update contacted an attorney who said Medicaid will take the entire estate. I have to still inquire about what happens with taxes owed. Stay tuned.
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Old 08-04-2016, 02:22 PM   #15
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Have you gone on Medicaid.gov to see what they say about this subject? It's a place to start.

I use the internet about anything legal as I avoid attorneys like the plague. Beats paying one $150 for looking at the same websites I'd be looking at.
hubbs tried combing through couldn't come up with definitives. we reached out to our lawyer we used for our wills so she just emailed with me.
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Old 08-04-2016, 05:13 PM   #16
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Likely that funeral expenses come first, then taxes, then Medicaid takes the rest they are owed more than the value of the estate. What taxes would be owed anyway?

This all stems from the Deficit Reduction Act of 2005. Passed by Cingress and implemented by the states. Most states apply the provisions to long term care, but some states like California apply to everything paid for by Medicaid after age 55.


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Old 08-04-2016, 07:55 PM   #17
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And that puts lower income people between 55 and 65 in a very precarious position in California. Do they go on Medi-Cal and risk losing the house and/or what few other assets they have accumulated when they die or do they risk being uninsured? I know at least one person that has chosen to be uninsured.
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Old 08-04-2016, 08:29 PM   #18
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And that puts lower income people between 55 and 65 in a very precarious position in California. Do they go on Medi-Cal and risk losing the house and/or what few other assets they have accumulated when they die or do they risk being uninsured? I know at least one person that has chosen to be uninsured.

1) Not sure house would be at risk in a homestead state
2) life insurance may be the answer.


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