Many aging residents of New York may already be familiar with (or even dreading) the complex preparations often required to receive Medicaid benefits for nursing homes. Unfortunately, one aspect some may not be aware of is that some preparation for eligibility only effectively protects assets during their lifetime. They are allowed to receive Medicaid benefits, but after their death, without careful Medicaid planning with a knowledgeable attorney, certain previously-excluded assets are claimed by the state.

Medicaid eligibility rules stipulate that some assets – such a primary residence and a single automobile – are excluded from being applied to the income threshold. However, without specific and careful arrangements otherwise, these excluded assets can become part of the deceased individual’s estate upon his or her death. This means that, through a probate process called estate recovery, the state has a claim against the deceased’s estate and remaining assets until they have recovered the value of all Medicaid benefits paid on the deceased’s behalf.

Even if an individual has a will, the assets cannot be distributed to beneficiaries until the state has recovered the balance for all Medicaid benefits paid. Often, this means that assets are sold off to fulfill this claim, leaving almost nothing for heirs and beneficiaries to inherit. Unfortunately, this occurs all too often, as many are not aware that there are tools at their disposal to help avoid this.

With the help of an experienced New York Medicaid planning attorney, there are potential methods to prevent recovery against an estate. One method is by holding titles to certain assets in such a way that they do not end in the probate estate to begin with and, instead, automatically pass to beneficiaries at death. There are also specific ways to designate life insurance beneficiaries that have a similar end result. Medicaid’s regulations are complex and sometimes overwhelming, but thankfully, there are professionals who can help with eligibility planning and asset protection.

Source:, “The rest of the Medicaid nursing home benefits story“, E. Wyles Johnson, June 28, 2017