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By Michael T. Lahti
Governor Baker of Massachusetts has proposed legislation that would significantly impact how families can protect their residences in the event of an extended nursing home stay. The governor is proposing “expanded estate recovery.” Expanded estate recovery would allow MassHealth to recover benefits paid on behalf of a deceased MassHealth beneficiary, by allowing for the recovery of non-probate assets. If enacted, this would target existing forms of ownership that families use (such as joint ownership, life estates, and irrevocable trusts) to protect their houses upon death. We will be monitoring this closely, as things unfold.
The salient part of the legislation (with emphasis added) is included below.
(c) For purposes of this section, if an individual became eligible for medical assistance prior to July 1, 2016, the term "estate" shall mean all real and personal property and other assets includable in the decedent's probate estate under the General Laws.
If an individual became eligible for medical assistance on or after July 1, 2016, the term "estate" shall mean any interest in real and personal property and other assets in which the individual immediately prior to death had any legal title or interest, to the extent of such interest. This shall include interests in real and personal property and other assets that would pass to a survivor, heir or assignee of the decedent through joint tenancy, tenancy by the entirety, life estate, living trust, right of survivorship, beneficiary designation or other arrangement. This shall not include annuities and life insurance held on the life of a decedent, with the exception of payments otherwise includable in the decedent's probate estate.
Notwithstanding any general or special law to the contrary, nothing in this section shall limit the division's right to receive payment where it is named or should have been named as a beneficiary under an annuity in accordance with 42 U.S.C. section 1396p(b)(1)(B).
(d) This subsection shall apply to the estates of individuals who became eligible for medical assistance on or after July 1, 2016. The division may also recover medical assistance correctly paid from the estate of that individual's surviving spouse. Recovery shall be limited to any legal title or interest in assets held by the predeceased individual's estate immediately prior to death that is includable in the estate of the surviving spouse.