How New Jersey’s Medicaid recovery system affects your estate

On Behalf of | Nov 17, 2020 | Elder Law |

If you reach a point in your life where you need Medicaid benefits in order to obtain care for yourself, your financial circumstances will affect your ability to qualify. For most adults, it is necessary to diminish their personal assets almost completely before the state will approve them for Medicaid coverage.

Certain assets, including your primary residence, generally don’t count against you when you apply for benefits. Some people perceive this decision as a form of generosity, but that generosity doesn’t last for long once you die. Medicaid can and often will take aggressive steps to recover what they paid for your care from your estate after your death.

Those recovery efforts can mean that they seize your liquid assets, such as bank accounts, and place a lien against your home. How does the New Jersey Medicaid recovery program work?

New Jersey will seek reimbursement for decades of payments

Medicaid recovery doesn’t just involve your most recent expenses, like nursing home care in your final years of life. The state can seek reimbursement for every single payment they made on your behalf after you turned 55.

Typically, recovery efforts start immediately after someone dies, and the state could lay claim to every cent you had set aside for your legacy and loved ones if you don’t take proactive steps to protect those resources.

That being said, special family circumstances can protect your loved ones. For example, if you have a disabled or blind adult child who still lives with you, a live-in child under the age of 21, or a spouse who lives in or is on the title for the property, the home may retain protection.

Planning before you need benefits protects your family

If you wait to think about Medicaid benefits until you desperately need them, your family may pay the price. Early planning for Medicaid qualification and asset protection can help you protect the assets that you want to pass on to your loved ones and can even make it easier for you to get benefits when you need them later in life.

Whether you already have an estate plan or need a more comprehensive review of your eligibility, getting help sooner rather than later will help you protect your loved ones and your legacy.