No Probate Assets, No Estate Recovery Payback

When a recipient of Medical Assistance (Medicaid) long-term care benefits dies in Pennsylvania, the next of kin will be contacted by the Estate Recovery Program of Pennsylvania’s Department of Human Services. Pennsylvania’s Medical Assistance Estate Recovery Program is looking for “probate assets” from which they can be repaid for the Medicaid long-term care benefits provided. 

Probate assets are normally administered by the personal representative of a decedent’s estate, such as an executor. Non-probate assets pass directly to the heirs without an estate administration, normally by joint ownership or beneficiary designations. 

Our office is often contacted by family members where no probate assets exist, and no executor, but where the Estate Recovery Program claims investigator is asking lots of questions about assets. Ignoring the letter is not recommended. The process can be upsetting, and sometimes confusing to our clients because not all assets of the deceased Medicaid recipient are subject to the Medicaid payback. 

The estate recovery claims investigators should only be seeking payback from assets that are “probate” and not from “non-probate.” For example, if the only asset in the deceased Medicaid recipient’s name was a joint bank account between say a parent and a surviving child, then there is no Medicaid payback against that bank account, since a jointly owned bank account is “non-probate.” Likewise, if your loved one passed away with a life insurance policy payable to a designated beneficiary then there is no estate recovery against the life insurance proceeds since they are non-probate.  

A bank account may not be subject to estate recovery even if it is a probate asset. If the account value is under $2,400, there is an exception to estate recovery and no payback against the small account, per 55 Pa. Code §258.10 (f).  

We believe it is best to address estate recovery matters head on. If there is estate recovery, it is best to address it now, and not be surprised by a problem months or even years later. Exceptions often apply. Where there is no estate recovery it is nice to have a closing letter in the file, so you have closure regarding Medicaid issues, and you can know there will not be a problem in the future.  

Our law firm can be hired to handle the communications between the executor or next of kin and the Estate Recovery Program, if needed. We do all we can to streamline the process, and work with the Estate Recovery claims investigators to make sure their questions are answered so they can close their file as quickly as possible.  

It can be confusing which assets are exempt and which are not exempt from estate recovery. If you have questions about estate recovery, please give us a call and we would be glad to see if our office can help.

Disclaimer: We recommend that you have ongoing legal advice from an elder law attorney before attempting to navigate the estate recovery process. If you have questions or wish to secure our services, please contact Gerhard & Gerhard, P.C.

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