Articles Posted in Estate Recovery

Are you a senior residing in Macomb, Oakland, Wayne, Ottawa or Kent County and need assistance with long-term care planning, elder law or veteran’s benefits to provide in home care, assisted living, or, nursing home care for yourself or for a loved one?

In my last entry we discussed the use of qualified or retirement assets to: (1) provide an additional “private” benefit to supplement monthly income; and, (2) to protect other non-qualified assets from “spend down” and estate recovery. In this entry we will explore the use of a home’s equity to provide care by supplementing monthly income.

A home with equity can also be used a s a “private benefit” for a senior that is not a veteran and needs assistance to cover the cost of his or her care. Using the equity to create a flow of income like or in place of a monthly VA benefit can create a solution to a long-term care problem.

Are you residing in Macomb, Oakland, Wayne, Ottawa or Kent County? Do you have a loved one or family member residing at a nursing home? Does he or she currently receive benefits from the State of Michigan in the form of long-term care Medicaid for nursing home care?

If the answer is “yes”, you may be exposed to estate recovery. Michigan adopted Estate Recovery, retroactively, for seniors that received Medicaid benefits. Estate Recovery is a law that entitles the State of Michigan to recover assets from an applicant’s estate if he or she received nursing home Medicaid benefits during his or her lifetime.

Although exemptions exist, the common target and biggest asset in an estate is a home. Homes are a protected or “non-counted” asset at the time of Medicaid application, but, now, following death, a home can become a target of recovery. The current statute, which may change, provides that the State may, effectively, lien the home through the probate process.

Yesterday, July 14, 2012 marked an important federal holiday, Flag Day. I tend to view Flag Day as an important federal holiday, just as important as Veteran’s Day and Memorial Day. Flag Day is an important day to honor our country’s flag and its symbolic significance. After all, “[i]t is the flag for which we fight for freedom” – Unknown.

Confused about Estate Recovery in Michigan? Apparently, so is the State of Michigan.

After several years of thumbing its nose at CMA, the State of Michigan finally adopted an estate recovery program. The legislature enacted law requiring estate recovery for long term care Medicaid recipients. The end result is that estate recovery will effect any nursing home recipient who received benefits prior to May of 2011. Although estate recovery was not formally accepted as a regulation within the state’s Medicaid system until July 2011, it is apparent that the State implemented the new law effective May of 2011.

Even more confusing than the effective date of the new law, its implementation is even more puzzling. The State has contracted with an outside agency, HMS, to collect debts from the estates of Medicaid recipients. The forms and procedures used by HMS are confusing to everyone, including attorneys and the agency itself.

Often times, as I meet with clients, I learn that a client has attempted to do their own estate planning. While Michigan law allows for holographic wills (a Will written and executed by an individual in their own handwriting) there are certain complexities that remain with estate planning in Michigan.

In fact, the biggest error that I routinely see is the failure to address “living probate”, by a “Do It Yourself Estate Planner”. As you may be aware, Michigan law allows for two type of probate: (1) living probate; and, (2) probate of the Estate. As most people try to avoid the probate of an estate after death, they often ignore avoiding probate in the event of a disability.

Simply stated, if you become disabled and are unable to handle your own affairs and have NOT made arrangements by executing power of attorney documents, your family will be forced to seek a guardianship and conservatorship in Probate Court.

This is because, in addition, to having authority of decedent’s estates, the probate court has exclusive jurisdiction (authority) over the matters of an incapacitated person. Although a guardian and conservator will have authority over the affairs and decisions of a disabled person, Court involvement is often expensive, restrictive and time consuming. Fortunately, for those who plan with an attorney, probate can be avoided at the time of incapacity and death.

Michigan law provides us with tools to avoid both forms of probate. Living probate can easily be avoided by executing power of attorney documents. A general durable power of attorney allows an individual to appoint someone else to handle his or her day-to-day affairs and manage his or her finances. A medical power of attorney allows an individual to appoint someone to handle his or her medical decisions in the event of disability.

Power of attorney documents can be complex. Therefore, it is always advisable to consult with a qualified elder law attorney to draft these documents to meet your estate planning goals. If you reside in Macomb County, or in the Metro Detroit area, and, are looking for an elder law attorney, call us at (586) 264-3756.
Continue reading

In November of last year, the State of Michigan adopted a new estate recovery law. For those of you unfamiliar with the concept, “estate recovery” is a term that describes the State’s ability to recover funds from people that have been approved to receive Medicaid benefits for nursing home care. For many Medicaid applicants this means that the State would have a right to file la lien against a Medicaid recipients estate. Primarily, the target of these recovery acts are the Medicaid recipients’ homes.

Following the enactment of the Deficit Recovery Act of 2006, the federal government made it clear that all states seeking funds for Medicaid programs needed to adopt an estate recovery statute. Seemingly, this provision targets Michigan, as it remained as the only state without such a law.

Michigan’s legislature slowly implemented such a law last year. The only remaining issue for it to be implemented was federal approval. At the end of October, we received word that the federal government rejected Michigan’s proposed estate recovery law. As a result, Michigan remains as the only state without an estate recovery law. For the time being, Medicaid applicant’s homes are safe.