Medicaid Estate Recovery

by Ira M. Leff, Esq.

September 29, 2009

One of the most controversial Estate Recovery provision is the rule that says that real property which passes by right of survivorship, life estate or trust is considered part of the decedent's estate for recovery purposes. DCH Rules § 111-3-8.02(6).

Several attorneys have consulted with me about the issue of a life estate owned by the Medicaid recipient being included in his estate for recovery purposes after his death. After all, the decedent's estate has no interest in the property from which the Estate Recovery department is seeking to recover.

What if a bona fide purchaser bought the remainder interest in real property from a Medicaid recipient in an arm's-length transaction during the recipient's lifetime. Upon the recipient's death title passes to the remainderman. Yet the Estate Recovery department asserts that it can put a lien on this property to collect monies owed by the decedent.

Craig Bonnell of Rincon, Georgia, has a case of a Medicaid recipient who died recently having owned a life estate in real property. She was 85 at the time of death. According to MEDICAID MANUAL § 2322, the life estate interest was worth 35.359 percent of the value of the fee simple prior to her death. Mr. Bonnell compared the Medicaid actuarial assumptions to those used by the IRS and found that Medicaid's were about 2 times those used by the IRS. See IRS Table S.

He was considering challenging the Georgia regulations which include life estates in the recoverable Estate. I pointed out to him that the rule on including property which passes by survivorship, life estate or trust comes directly from 42 U.S.C. § 1396p(b)(4)(B), so he would have to challenge the constitutionality of the federal law. Instead, I suggested that he might be able to effectively challenge the actuarial assumptions which underlie Medicaid's life estate table.

If any of you have challenged these Estate Recovery rules or have an opinion on the actuarial assumptions, please let me know.

Please click on any of the categories below to read more related Elder Law Minutes.

If you would like to join my mailing list, please click here.

Elder Law Minute is written and distributed by Ira M. Leff and Associates. The information contained therein may not be altered, appropriated, duplicated or transmitted without the express permission of Ira M. Leff. Information contained in this website is general in nature and not intended as legal advice. Visiting this website does not create an attorney-client relationship. Legal advice should be obtained before any action is taken based upon information in this website. Sending an inquiry to our firm does not constitute engagement of our services nor does it establish an attorney-client relationship.

Copyright © 2008–2013 Ira M. Leff, Attorney at Law. All rights reserved.
1722 Pinetree Circle / Atlanta, Georgia 30329 /
Direct dial: 404.633.1801 / Fax: 404.633.1830

Website design by Click Design . Website Maintenance by NFI Atlanta.
If you have any questions or issues regarding this website please contact