Saturday, January 23, 2016

In case of emergency

A family dealing with a sudden illness or injury sustained by a loved one will not be thinking of all of his or her details, but they should keep track of bills as they are received and come due. They should make sure that utility bills are paid, propane tanks remain full, etc.

In particular, they should make sure that premiums on health insurance, life insurance, disability insurance, auto insurance, and homeowner's insurance are paid and kept current. For some of these coverages, keeping them in force will be of crucial importance to the affected person and his or her family.We have seen numerous cases where life insurance benefits that the family expected, and depended on, are not paid because the insured, due to lengthy illness before he died, allowed the policy to lapse for non-payment of the premium.

Sunday, January 3, 2016

Michigan estate recovery

The estate recovery program allows the State of Michigan, in some cases, to seek repayment of Medicaid benefits for nursing home care and home health care after the recipient has died.  Mandated by Federal law, estate recovery is essentially a tradeoff for the fact that the recipient's home is not included as a "countable asset" (if its value is under $500,000) when calculations are done to verify that the recipient has assets below the maximum allowed to qualify for Medicaid coverage.

In the majority of cases, for a couple of reasons, the only asset for which the estate recovery claim is asserted is the recipient's home.

Michigan's estate recovery statute, found at MCL 400.112g and 112h, allows for recovery only against "probate assets," that is, property owned by the decedent in his sole name which does not pass to others by operation of law, and for which it is necessary to open an estate in probate court. Property which passes under joint tenancy, for example, is not subject to estate recovery in Michigan. A home owned by husband and wife as tenants by the entirety is likewise not subject to estate recovery. (In other states, such as Wisconsin, jointly-held assets are also subject to the estate recovery laws.)

When the family home is included in the probate estate, there are several exemptions and limitations that are important. The first and most significant is that the home may not be subject to estate recovery if the surviving spouse is residing there. Further, there is a monetary limitation when that exemption does not apply. The home is subject to estate recovery only to the extent to which the price that it can be sold for by the personal representative exceeds
  • "50% of the average price of a home" in the county, plus
  • the costs of estate administration, funeral costs, etc., and
  • all applicable statutory exemptions
The exemptions that are allowed under statute include the homestead allowance, the family allowance, and exempt property. If all three apply, when the decedent leaves a surviving spouse, the total amount can be as high as $64,000, given the current applicable figures.

An unpublished decision of the Michigan Court of Appeals issued in 2015 ruled that the person seeking to apply the 50% average price limitation must take steps to apply for it, and must do so within the time that the department specifies. It will not be automatically available.

Today, eight years after estate recovery was enacted, and five years after it went into effect, there is still some uncertainty as to how "the average price of a home" in a given county can be calculated. There are a couple of online sources that can provide assistance on this issue.

If you have received an estate recovery notice, be sure to consult with an experienced attorney to ensure that the needed steps can be taken.

Over the line

 NPR describes the experiences of those who inadvertently ended up disqualifying themselves from SSI and other programs managed by the Soci...