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How much of your estate is vulnerable to Medicaid recovery?

On Behalf of | Oct 18, 2022 | Estate Planning |

To qualify for Medicaid, individuals need to meet strict limits established for both their current income and their personal property. It can be very difficult to qualify for Medicaid quickly when someone realizes that they need benefits.

Virginia is not particularly forgiving when it comes to Medicaid applications. The state will look back at 60 months of financial records to determine whether someone qualifies and if a penalty applies. However, going through the effort to qualify for Medicaid can protect those who need expensive care, like a stay in a nursing home.

Qualifying for benefits isn’t the end of the process. You could still face estate recovery efforts later.

Any assets you have, the state could claim

Even after you qualify for benefits, the state may still want you to pay back those benefits if you can. When you die, the property in your estate may have to go to repay your health care coverage instead of supporting your loved ones.

The Virginia Medicaid estate recovery program will ask for the liquidation or sale of some of your property to recover what the state paid for your medical support. How much of your estate is at risk?

Medicaid can take everything, even your home

The unfortunate, harsh reality for adults who need Medicaid benefits is that Medicaid estate recovery efforts take priority over beneficiary claims during probate proceedings. The representative of an estate in Virginia must use estate property to repay Medicaid and other creditors before giving anything to beneficiaries or heirs. The probate courts can even require that the estate liquidate or sell off your assets, including your house, to pay back the cost of those medical benefits.

Advance planning protects everyone

If you take the time to create a plan that changes how you hold your assets or allows for their immediate transfer after your death, you can protect at least some of your property from Medicaid claims after you die.

Advance planning can also be beneficial because it will make it easier for you to qualify without any penalty when you need benefits later in life. Learning about how Medicaid coverage works in Virginia can help those creating or updating their estate plans make better choices.