By: Sanford R. Altman, Esq.
The New York State Department of Health has finalized regulations for expanded estate recovery for Medicaid which can hurt seniors, baby boomers, their children and even their grandchildren.
Essentially, the new regulations allow the government, in ways it never could before, to take assets from your family's inheritance after you die to pay itself back for any Medicaid payments you received during your lifetime. In the past, the government had always been limited to reimbursing itself from probate assets - those assets that had to go through court before passing on to your family. Now, the state can take from almost anything you own including living trusts, joint accounts with your children, bank accounts in trust for your grandchildren and on and on, property that used to be safe for your family.
Most troublesome is the loss of protection for your home, often your most valuable asset. Over the years, it has been very common for people to transfer their homes to their children while retaining the right to live in their home for their lives. In this way, the children would automatically own the home upon the parents' death without the time and expense of probate proceedings. In addition, if the parents were able to obtain help from Medicaid and pay the $12,000 to $15,000 per month fee of a nursing home, their home would be safe from being used to pay back Medicaid. However, in a drastic reversal of this long time protection, your home with your retained life rights is now fair game for Medicaid recovery like any other asset. If your children were planning to move into the house and live there, now they may have to sell it just to pay back the government.
In addition, there is no "grand-fathering". It doesn't matter if you deeded your home to your children retaining a life estate for yourself twenty (20) years ago when it would have been totally protected. The State apparently believes it is fine to change the rules mid stream. In short, you have been blind sided by the State.
What are our next steps? Since so many may be adversely impacted by the new regulations, it is important to attack this issue on all fronts. In the short time since the rules became official, elder law attorneys throughout the state have been working together to develop new strategies to protect our clients. Whether you have a plan in place or have been contemplating doing so, it is vital to visit an experienced elder law attorney as soon as possible. Remember that there is a five year look back period during which you may be penalized for making transfers so planning early is key in protecting your assets for you and your family.
In addition, our New York Chapter of the National Academy of Elder Law Attorneys is working towards a legal challenge to the law in the Courts. I will keep you posted as to progress.
Finally, these regulations can all legally be set aside by our State Legislator. Now is the time to flex our large political muscle and tell our State Senators and State Assembly Persons that we want them to reverse the expanded estate recovery for Medicaid. Public outcry has already defeated such laws in other states, we can certainly do the same in New York.
