New Jersey Gets Aggressive with Estate Recovery (Part 2)

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Recovery Defense Attorney

In Part 1 of this series I introduced you to a recent Appeal involving a priority lien for reimbursement of Medicaid benefits. In this post I would like to discuss more details of this case.

When determining eligibility for Medicaid, the state considers all income and resources owned by the individual and resources which the individual is legally entitled to receive but does not receive because of action or inaction taken by the individual, or by any person, including a court or administrative body with the legal authority to act in place of or on behalf of the individual.

A “resource” is defined under NJ Medicaid law as any real or personal property which is owned by the applicant (or by those persons whose resources are deemed available to him or her as described in N.J.A.C. 10:71-4.6) and which could be converted to cash to be used for his or her support and maintenance. Both liquid and non-liquid resources are to be considered in the determination of eligibility unless they are specifically excluded under N.J.A.C.10:71-4.4(b).

Federal Medicaid law requires states “to enact certain ‘estate’ recovery provisions as part of their medical assistance plans.” Specifically, “in the case of an individual who is 55 years of age or older” when he or she receives medical assistance, states are required, in pertinent part, to “seek adjustment or recovery from the individual’s estate, both for medical assistance consisting of; nursing facility services, home and community-based services, and related hospital and prescription drug services. States may recover Medicaid benefits after the death of the recipient’s surviving spouse provided that the Medicaid recipient leaves ‘no surviving child who is under age 21, or is blind or permanently and totally disabled.”

To satisfy the federal estate recovery requirements, states must define a decedent’s estate to include at least “all real and personal property and other assets included within the individual’s estate, as defined for purposes of state probate law.” However, federal estate recovery requirements permit participating states to adopt broader definitions of “estate” that may include: any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.

New Jersey has enacted statutes to comply with the federal estate recovery requirements. N.J.S.A. 30:4D-7.2(a)(2) permits the Commissioner of DHS to file a lien “against and recovery sought from the estate of the deceased recipient for assistance correctly paid or to be paid on his behalf for all services received when he was 55 years of age or older. Consistent with federal law, New Jersey has enacted a statute that defines “estate” as including; all real and personal property and other assets included in the recipient’s estate as defined in N.J.S.A. 3B:1-1, as well as any other real and personal property and other assets in which the recipient had any legal title or interest at the time of death, to the extent of that interest, including assets conveyed to a survivor, heir or assign of the recipient through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.

I will discuss the N.J. regulations in more detail in my next post.

To discuss your NJ Estate Recovery matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.