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Plan ahead for estate recovery
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With long-term health care costs soaring, you may be wondering if you or your parents qualify for Medicaid.
Nationwide, the cost of assisted living rose almost 5 percent in the last year while nursing home care went up an additional 3 percent to 4 percent, according to the recently released Genworth Cost of Care Survey. In Savannah, a private room in a nursing home costs $66,613 on average, according to the study.
With those kinds of costs, Medicaid is often the only option. But before you dive in, make sure you know what you’re getting into. It’s not enough to qualify for Medicaid unless you also plan for the possibility of estate recovery. Many people do not realize that without proper planning the state may recoup the costs of care by taking the family home after their loved one dies.
The Omnibus Budget Reconciliation Act of 1993 requires that states recover funds spent on Medicaid recipients after their death. Georgia began enforcing the act in 2006.
Because of Medicaid’s strict financial limitations, the family home is often the only asset a recipient has. Medicaid recipients in Georgia are restricted to $2,000 in assets (other than the home and other qualified assets) and $2,130 in monthly income.
A Medicaid recipient’s spouse may have up to $115,920 in assets, retain their own income and take in their spouse’s income if necessary to bring their own income up to $2,898 per month.
In addition to the house, Georgia law also allows the state to pursue recovery of real property passing by right of survivorship, life estate, trust, annuity, homestead or any other arrangement. The state also may seek reimbursement by attaching excess funds from a burial trust or contract, promissory notes, cash and personal property.
Your assets are not safe simply because you put them in joint ownership with your spouse or child. If you have any legal interest in the property at your time of death, Georgia could pursue those assets for estate recovery purposes.
Estate recovery applies to Medicaid recipients of any age who were in a nursing facility, intermediate care facility for people with mental retardation or other mental institution or who were at least 55 and received home and community-based services instead of institutional care.
Only estates that are valued less than $25,000 are excluded from estate recovery. Exclusions also may exist if the property is a family farm with less than $25,000 annual gross income or if recovery of assets would result in the heir becoming eligible for need-based public assistance and/or medical assistance programs.
You may have a claim that would help you delay or altogether avoid Medicaid Estate Recovery. If your spouse or parent is receiving Medicaid, consider consulting with a qualified elder law attorney to find out more.

Barid of Richmond Hill and Michael Smith are co-founders of Savannah-based Smith Barid LLC. They can be reached at 912-352-3999 or or

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