« New Medicaid Restrictions On Transfers Of Homes | Main | Learning to Utilize Exempt Assets to Qualify Immediately for Medicaid »

New York Expands Estate Recovery For Reimbursement of Medicaid Benefits

Federal law has always allowed states broad recovery against the Medicaid recipient’s estate for the reimbursement of paid Medicaid benefits. The U.S. Code of Laws defines an “estate” for the adjustment or recovery of medical assistance correctly paid under a State plan as all real and personal property and other assets included within the individual’s estate, as defined for purposes of State probate law. States also have an option to include any other real and personal property and other assets in which the decedent had any legal title or interest in at the time of death such as assets conveyed to a survivor, heir or assign of the deceased through joint tenancy, tenancy-in-common, life estate, living trust or other arrangement.

But historically, NY laws, regulations and practice limited recovery of Medicaid payments to a recipient’s probate estate.  However, with the budget deficit and Governor Cuomo’s voter mandate for fiscal reform, the New York legislature has adopted recommendations made by Governor Cuomo’s Medicaid Redesign Team.   This team issued its recommendations on February 24, 2011 and the law was revised on April 11, 2011 and the implementing regulations issued from the Department of Health on September 8, 2011. 

See figure 1 below for a clear definition of probate estate assets.


Probate Assets

Non-Probate Assets

  • Only “probate” assets will pass in accordance with the terms  of your Will, such as:
    • Bank Accounts
      • titled only to the decedent or held as tenants-in-common
    • Real Property
      • titled only to the decedent or held as tenants-in-common
    • Personal Property
    • Business Interests (though contract terms may dictate valuation and transfer of title)
  • IRAs
  • Defined Benefit Plans
  • Life Insurance
  • Annuities
  • Certain Bank Accounts
    • Joint Tenants
  • Certain Real Property
    • Tenants by the Entirety
    • Joint
  • Any other assets with a “Designated Beneficiary Form”
  • Retained Life Estates



This is major cause for concern in the realm of elder law. Whether you already have an asset protection plan in place or are seeking to create one, it is important to understand the impact of the changes on asset recovery.

Due to a massive budget deficit and laws that restrict reducing services, New York has acted to change its laws and regulations to allow for the fullest estate recovery allowed by federal law. On April 1, 2011 a change occurred in the New York Codes Rules and Regulations where paragraphs were added to current law defining  an “estate” in Section 360-7.11(b) pertaining to Medical assistance liens and recoveries. The new paragraphs expanded the definition of “estate” to include any property in which the individual has any legal title or benefit interest at the time of death, including jointly held property, retained life estate, beneficial interest in a trust to the extent of such interest.

It is clear from these modifications to the definition of “estate” for recovery purposes that many elders assets could be vulnerable to Medicaid recovery or loss of services. Consultations with an elder law attorney will ensure qualifying for Medicaid and prevent assets from unnecessarily being subject to Medicaid recovery.  At Laidlaw Firm, we offer free initial consultations.  Please feel free to call (914) 767-0646 or email us at cgriffin@laidlawfirm.com to schedule an appointment.

Related Links: