A recent article in Forbes pointed out that changes to the state’s Medicaid program may have a significant effect on existing estate plans and estate planning going forward. The new Medicaid regulation reportedly went into effect in early September, and will allow the state of New York to get back any costs spent on individual Medicaid services.
According to sources, estate recovery of the cost of Medicaid services can come from any assets passing by will, intestacy, or real and personal property. That is in contrast to the old law, under which only probate assets were subject to an estate recovery of Medicaid costs. Basically what this means for New Yorkers is that they have a greater need to protect their assets than before when engaging in Medicaid planning. The changes were reportedly made because of budget concerns.
While the New York law does not affect our readers, it is a good reminder of the fact that changes in Medicaid law can certainly affect estate planning, particularly where the estate plan makes use of Medicaid Planning strategies.
The basic purpose behind Medicaid Planning is to ensure that your assets will not be used to cover the costs of nursing home and other health care in your old age, but for the benefit of your family. Purchasing long term care insurance and doing what you can to ensure you are eligible for benefits under Medicaid and Medicaid are part of the basic strategy in this area.
Medicaid is a joint federal, state and city program that provides medical assistance to those with low income and few assets. In some states Medicaid is available to persons with higher incomes. Each state is a bit different, so it is necessary to work with an attorney familiar with the laws of your area when coming up with a Medicaid planning strategy.
Source: Forbes, “New York Medicaid changes Affect Estate Plans,” Bernard A. Krooks, November 2, 2011.