I am on a deed with my Aunt, she is 99 years old been on Medicaid. We are selling the house.

Q) I am on a deed with my Aunt on a property in Pueblo. I was added to the Deed in 1984. She is in an assisted living facility. She is 99 years old and has been on Medicaid since entering the facility in 2015. We are selling the house for various reasons, one being the constant maintenance, upkeep, and risk of holding on to it. I realize Medicaid has the right to some of her share under the Medicaid Estate Recovery Program. I want to ensure I am doing everything correctly.

A) I can help you with some information on the Medicaid Estate Recovery Program in Colorado and how to protect your property from it.

The Medicaid Estate Recovery Program (MERP) is a federally mandated program that requires the state of Colorado to recover Health First Colorado (Medicaid) expenditures correctly paid on behalf of certain Health First Colorado members. After the death of a person who has received medical assistance, the law requires that certain individual’s assets be used to repay the Colorado Department of Health Care Policy and Financing (Department) for these benefits.

The Department can only recover from the probate estate of the deceased Medicaid recipient, which means the property that is subject to probate administration. This includes real estate, personal property, bank accounts, and other assets that are owned solely by the deceased person or as a tenant in common with others.

There are some exemptions and waivers that may apply to your situation, such as:

  • If your aunt is survived by a spouse, a child under 21, or a child who is blind or disabled, the Department cannot recover from her estate.
  • If you have been living in the property for at least one year before your aunt entered the facility, and you have continuously maintained the property, you may qualify for the caregiver exemption. This means you can keep the property as long as you file a claim with the Department within 60 days of your aunt’s death.
  • If you have an equity interest in the property, and the sale of the property would cause you undue hardship, you may qualify for the hardship waiver. This means the Department may reduce or eliminate its claim against your aunt’s share of the property. You need to apply for the waiver within 30 days of receiving the notice of claim from the Department.

There are also some ways to protect your property from MERP before your aunt passes away, such as:

  • Transferring the property to an irrevocable trust that holds the title of the home. Irrevocable means the terms of the trust cannot be changed or canceled. This way, the property is no longer part of your aunt’s estate and is not subject to MERP. However, you need to do this at least five years before your aunt applies for Medicaid, otherwise it will be considered a violation of the Medicaid look-back period and may affect her eligibility.
  • Transferring the property to a sibling who has an equity interest in the property and who has been living in the property for at least one year before your aunt applies for Medicaid. This is another exception to the Medicaid look-back period and may allow you to avoid MERP. However, you need to make sure that the sibling is not also a Medicaid recipient, otherwise the property may still be subject to recovery.

I hope this helps you with your situation. Please note that I am not a lawyer, and I cannot provide you with legal advice or representation. If you need more guidance or assistance, I suggest you consult with a qualified estate planning or elder law attorney in your area.

Add a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.