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Can Medicaid garnish your estate?

On Behalf of | Dec 6, 2021 | Elder Law, estate administration & probate, Medicaid Planning |

If you aren’t aware of the Medicaid Estate Recovery Program (MERP), it might help to speak with a lawyer. The Medicaid you receive can be garnished from your estate upon your death. Estate owners need to protect their assets from creditors, tax collectors and fraud. Your estate can avoid these risks by correctly abiding by elder laws in Indiana.

What’s at risk

Medicaid recipients aged 55 and older are subject to having the State recoup the expenses it incurred from long-term medical services. This specific provision focuses on the elderly who rely on extensive care. The Omnibus Budget Reconciliation Act (OBRA) gives states the right to recoup their expenses at the death of a decedent.

The impacts of OBRA

Any money unused from Medicaid can go to estate expenses or someone’s inheritance. Even if no money is leftover, the State could seek all of the expenses used to provide you care while you were alive. This may call for a seizure of property within your estate directly. What’s leftover from Medicaid isn’t the only eligible asset.

The taxpayer rationale

The rationale behind the state recouping its Medicaid cost is taxpayers. Since the care offered by Medicaid is paid by taxes, OBRA collections make care cheaper for the living elderly. Now, this isn’t an excuse to attack your private assets or disrupt the inheritance of your beneficiaries. For these reasons, local elder laws can help you.

Elder laws in Indiana

Like children in court, the elderly have rights that account for their disabilities. By having a living spouse, for example, the State can’t recoup its medical expenses from you. You can also consider strategizing now, for the state has an entire year to file its claim.