Does a Will Supersede Medicaid Rules?

Does a Will Supersede Medicaid Rules?Medicaid and its related programs provide medical coverage to approximately four million Texas residents. The basis of Medicaid is that the individual is of very low income. However, your Bryan probate attorneys will tell you that if the recipient has assets at his death, Medicaid has the right to recover payments made to them.

Background

Medicaid was created along with Welfare and other low-income relief in 1965 with the purpose of helping very low-income residents with assistance in paying for long-term hospitalization, including nursing home care.

The purpose of the program was to assist low-income individuals in the following ways:

  • Ensuring continuity of healthcare
  • Emphasizing prevention of medical conditions
  • Making sure that recipients of Medicaid had a home equipped for medical care
  • Ensuring high quality, comprehensive medical care for the recipient

Some residents tried to work around the system by gifting property to the extent of having almost no remaining assets. If assets remain in a will after the person’s death, however, Medicaid has the right to recover costs by taking money from the estate. Initially only probated assets could be taken, but as of 1993 assets from other sources, such as life insurance policies, can be seized as well.

It should be noted that Medicaid cannot take assets from individuals who are still alive, such as through wage garnishment. Moreover, children under age 21 and blind or disabled children are exempt as well. Finally, Medicaid is only allowed to seize assets from individuals who were over the age of 55 or were institutionalized when they received payments.

Priority of Claims

Probate laws generally have an order of priority for the taking of assets from an estate. Taxes and secured creditors take precedent. Secured credit is credit to which an asset is attached as collateral, as opposed to, say, credit cards. Funeral costs are also usually paid first before Medicaid claims. The assets of beneficiaries cannot be taken to pay for these costs.

Medicaid Rules Generally Prevail

It is important to keep in mind that if you are receiving Medicaid, assets you acquire later may be used to pay for the coverage you received. If you have questions of concerns, call Bryan probate attorneys at Peterson Law Group at 979-703-7014 or 936-337-4681.

About Chris Peterson

Chris Peterson is an attorney and the owner and founder of Peterson Law Group, a Texas law firm with offices in Bryan/College Station and Kingwood. He mainly practices in the areas of Estate Planning and Business Planning. Chris is also a Certified Estate Planner. Besides his law practice, Chris is a serial entrepreneur and community volunteer. He is known for his cutting edge law practice that utilizes technology to deliver efficient, excellent work.