Limits on the books for state-placed liens

    Going into a nursing home is not much different than going into a supermarket. In fact, most nursing homes are private businesses, much like supermarkets. They must charge for their goods and services, just like supermarkets charge for their products. As we all know, supermarkets don't care if you pay for their products with your money or if you use food stamps. Similarly, nursing homes accept payment from residents' own funds as well as from any state aid for which residents may be qualified.
    Applying for state aid for a nursing home is not much different than applying for food stamps. Though the eligibility criteria are somewhat different, in the end, both programs are for people who are, at least in the eyes of the law, indigent. Once a person qualifies for state aid for nursing home care, in most cases, the government starts paying most of the expenses associated with the nursing home care. When you look at the expense involved, it is easy to see how the state might pay tens of thousands of dollars or even hundreds of thousands of dollars for a person's care in a nursing home.
    With those types of numbers, the government must try to recoup what it has paid. Therefore, if a person qualifies for aid and enters a nursing home, when the person passes away, the state will see if the individual had any assets passing through probate and it will lien those assets. As you can see, the state's lien typically is limited to assets passing through probate only, not to everything that the person owned. Also, liens are limited to only the amount the state actually paid for the person's benefit, not to all assets passing through probate.
    In addition, there are other circumstances in which the lien typically will not apply. Perhaps the most common is if the applicant is survived by a spouse. Most other exceptions are very narrow in scope such as when someone receiving Medicaid benefits is survived by a minor or adult child with a permanent disability.
    We have often advised that people structure their estates in a manner to avoid probate. Doing so carries its own set of benefits, but also brings with it a very special advantage in that if properly structured, an individual's assets would avoid the lien given to the state for provision of long-term care assistance. Of course, anyone looking to pass assets to the next generation must take into account not only the lien that the state can exercise, but also the regulations set up to force people to use their own resources for long-term care prior to asking the government to pay for such services.
    In addition to the complexity of Medicaid regulations, we see our clients' lives affected by probate law, tax law, real estate law, estate planning law and various other areas of legal concerns. Navigating through that thicket is best done with a guide who has had ample education and experience in those and related areas.

    Paul A. Brule is an attorney with the firm of Walsh, Brule & Nault, P.C. in Cumberland. He can be reached at (401) 334-4545.