Will Medicaid Affect My Ability to Leave My Home to My Kids When I Die?

By Lane V. Erickson, Idaho Estate Planning Attorney

When a parent, family member, or loved one passes away we offer a free consultation to individuals to discuss the things that need to be done. Often, this consultation includes a discussion about completing a probate for the estate of the person who passed away.

A probate is required in Idaho anytime a person dies when they have an ownership interest in a home, or any other kind of real estate. Additionally, a probate is required in Idaho anytime a person’s estate is valued at $100,000 or more regardless of what’s in the estate. When it comes to a surviving spouse, the probate that can often be done for their deceased spouse is a specialized probate called a summary administration. Usually the focus of these types of probate is to transfer the decedent’s ownership interest in the home or other real estate to the surviving spouse or other beneficiaries of the estate.

While this sounds simple it sometimes is not. This is because sometimes, the decedent, obtained or received Medicaid benefits while they were alive. In most instances, the Medicaid benefits the decedent received must be paid back by the estate before distributions can be made to the beneficiaries.

The purpose of this article is to provide a short summary of how Medicaid can affect probate and distribution of the decedent’s assets. Please keep in mind that this article is just a summary. If you have particular questions about how Medicaid can affect probate or the distribution of assets after a person passes away, we encourage you to contact us for a free 30-minute consultation where we can answer your questions and help you understand what needs to be done in your particular circumstances.

The first thing you need to know is that whenever a family member or loved one dies, there may be a requirement to notify Medicaid of their death. Specifically, Idaho statutes require a notice of death to be made to Medicaid by the personal representative of the estate anytime the decedent received medical assistance and was 55 years of age or older. See Idaho Code § 15-3-801(d), and Idaho Code § 56-218.

The problem is, sometimes, family members do not know that their parent or loved one was receiving Medicaid benefits. Because of this, we help all personal representatives provide the required notice to Medicaid in every probate.

Medicaid is operated through Idaho under the Idaho Department of Health and Welfare. During the probate process, we provide a notice of death of the decedent along with personal information including either the death certificate or the decedent’s social security number to the Department. The Department is then required to provide a written response stating whether any medical benefits were provided to the decedent while they were alive.

In most instances we receive a letter indicating that no benefits were provided. However, every once in a while, we do get a letter from the Department indicating the benefits were provided. In this instance, they also provide an itemized statement of the benefits that were provided together with a summary of the total benefits by dollar amount. This gives the personal representative the ability to review the statement and challenge any of the charges listed.

Any medical benefits that were provided to the decedent become a lien on any real property owned by the decedent. This is usually the family home. In other words, if a person received Medicaid benefits of $50,000 during their lifetime, that $50,000 debt becomes a lien on the home. When the home is sold, that debt is paid back to Medicaid.

It’s important to understand that if the decedent has a surviving spouse, one or more minor aged children, or a child who has disabilities, who continue to live in the home, the lien exists but will not be exercised. In other words, the lien attaches to the home, but the spouse, or disabled child can continue to live in the home for the duration of their lives. It’s only upon their deaths that the lien would be exercised, and the home would be sold to satisfy the lien.

When it comes to minor aged children, they are able to live in the home until they become adults and for a period of time thereafter before the lien would be exercised against the home. The purpose of doing this is to make sure that these specific individuals have a place to continue to live. The lien remains on the home until such time as it can be sold, and the debt associated with the lien paid back.

If you have questions about whether a Medicaid lien exists on a home of a family member or loved one, or if you have other questions concerning how Medicaid might affect an estate, we can help. We have assisted numerous clients through the probate process including dealing with Medicaid liens and claims and we are confident that we can help you too! Call us today for a free 30-minute consultation where we can answer your questions.

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho Estate Planning problems.