How To Avoid Masshealth Estate Recovery

MassHealth Estate Recovery is a program where the state seeks repayment for certain MassHealth (Medicaid) benefits paid on behalf of a deceased beneficiary, typically from their estate. Avoiding or minimizing estate recovery involves careful planning and understanding of the rules. Here are some steps and strategies that can help:

How to Avoid or Minimize MassHealth Estate Recovery

Understand What’s Recoverable
- MassHealth generally recovers costs for long-term care services paid after the beneficiary turns 55.
- Costs related to certain home and community-based services may also be recoverable.
- MassHealth does not seek recovery for all services (e.g., acute care or children’s services usually aren’t recovered).
Use Proper Estate Planning Tools
- Create a Trust: Transferring assets into an irrevocable trust can protect them from estate recovery if done properly and well before needing MassHealth.
- Joint Ownership: Holding property jointly with right of survivorship may avoid probate but could have other tax or eligibility consequences.
- Gifting Assets: Transferring assets before applying for MassHealth—but beware of Medicaid look-back periods (usually 5 years) that penalize transfers made to qualify for benefits.
Maintain Exempt Assets
- Some assets are exempt from estate recovery, such as a surviving spouse’s home, burial plots, certain personal belongings, and some life insurance policies.
- Work with an elder law attorney to understand which assets can be protected.
Consider Spousal Protections
- If there is a surviving spouse, certain protections apply that may exempt some or all assets from recovery.
Plan for Burial Expenses
- Prepay or set aside funds for burial expenses, which can reduce the value of the estate subject to recovery.
Consult an Elder Law Attorney
- Laws and rules can be complex and subject to change.
- A qualified elder law attorney can help design a plan tailored to your situation, balancing Medicaid eligibility and estate recovery risk.