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Let’s Clarify the MassHealth Notice Sent to All Members That is Causing Anxiety and Confusion

MassHealth Planning - Margolis-and-Bloom-Patricia C. Dagostino

MassHealth recently sent this notice about estate recovery out to many beneficiaries. We anticipate the agency will send this notice to another batch of members at the beginning of July, we are receiving a lot of calls from clients asking what this means and so here is a brief summary.

As stated in the notice, if you are receiving MassHealth benefits, the agency can seek to recover from your estate upon your passing or, during your life (if you are a nursing home resident not expected to return home and your primary residence is sold while you are living) for the value of any services it has paid on your behalf after age 55, or at any age if services are paid for a skilled nursing facility.

There are many options to protect you from estate recovery or a lifetime lien. For example, if you are receiving MassHealth in the community, a simple revocable trust may work to protect your assets from recovery. And, if you are in a skilled nursing facility, your primary residence may be protected if you have it in an irrevocable trust or if you have a life estate deed. Although, a life estate deed will not protect the property in its entirety from a lien if the property is sold during your lifetime.

There are also exceptions to estate recovery. Some of these exceptions are listed on the notice and the estate recovery hardship waiver provisions were recently updated as explained here. In addition to the exceptions listed on the notice, you may also be able to transfer your assets without penalty to a disabled child or to a trust for a disabled child. In addition, there is an exception allowing you to transfer your primary residence to a “caretaker child” to avoid repayment. The caretaker child exception will apply if you lived with your child for at least two years prior to moving into a nursing home and the child provided care to you that kept you out of a skilled nursing facility. This must be documented by a medical professional.

Bottom line:

· Do not panic if you receive this letter.

· Call our office if you receive this letter and you are unsure if your assets are protected against estate recovery or a lifetime lien. We can quickly tell you where you stand and if we recommend you take any action.

· If you have a disabled child or a “caretaker child”, please call our office to find out if you should transfer your primary residence or other assets.

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