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A Better Partnership


May 2012
May 01, 2012

Estate Planning Tip: New Decision On Estate Recovery

New Decision On Estate Recovery

A decision by the Clinton County Probate Court indicates that estate recovery claims by the State of Michigan against the homes of Medicaid recipients who began receiving benefits prior to November, 2011 may be subject to challenge.  Michigan's estate recovery law was passed in 2007.  However, the State did not begin implementing the program until July, 2011. Since then, the State has been asserting the right to recover Medicaid expenses from the estates of any Medicaid beneficiaries who received long term care Medicaid benefits after July, 2010.  However, the Michigan estate recovery law requires the State to provide information to Medicaid applicants about the estate recovery program and notice that their estates may be subject to estate recovery.  The State did not start providing such notice until November, 2011.  Therefore, estate recovery claims against any beneficiary who began receiving benefits prior to November, 2011 may be denied due to failure to provide notice.

The decision is not binding on other courts in the state.  Moreover, the Attorney General’s office has indicated it will appeal the decision.  However, the well reasoned opinion has a good chance of surviving appeal.  Any appeal will take months to resolve.  In the meantime, the opinion may serve as persuasive authority for other courts and allows estates of Medicaid beneficiaries who began receiving benefits prior to November, 2011 to deny estate recovery claims by the State with greater confidence.

It is possible to avoid estate recovery claims completely with advance planning.  The best way to do this depends on many factors, including the current age, health status, marital status and family stability of the individual.  Because of the complexities, it is wise to counsel any client or family member who owns a home to seek legal advice on how to avoid claims by the State against the family home.


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