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Effective: December 1, 2006 |
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19.50ar1 - Liens and Estate Recovery (Archive) |
Archived: April 1, 2009 |
Liens and estate claims are a means for the State of Minnesota to recover the cost of MA, QMB, SLMB, QI or GAMC payments when a client dies. They are filed when a client meets specific criteria governed by state and federal law.
Liens were instituted to minimize clients transferring real property.
Programs Not Subject to Estate Recovery.
Programs Not Subject to Estate Recovery
Do not file estate claims or pre-death liens against clients receiving benefits from MinnesotaCare (MCRE) or the Consolidated Chemical Dependency Treatment Fund (CCDTF). Do not file estate claims for services received by Alternative Care clients prior to July 1, 2003.
Example:
Myrtle received MCRE for two years followed by two years of QMB until her death.
Action:
An estate claim or lien may be filed following QMB policy for expenses paid under that program, but not for expenses paid by the MCRE program.
Estate recovery and pre-death liens may be used to recover the cost of services or benefits received by enrollees of MA, QMB, SLMB and QI programs. The rules for estate recovery differ from the rules for TEFRA liens. Refer to the appropriate subsection for detailed policy to determine if an estate claim and/or a lien should be filed.
There are two procedures for estate recovery. The county can file an estate claim in the probate process or an Affidavit of Collection of Personal Property in cases that do not require probate.
l Notice Requirements.
Provide notice of the claim to all heirs and survivors of the decedent that you can determine through reasonable diligence. The notice must include all of the following:
n Procedures and instructions for making an application for a hardship waiver.
n Timeframes for submitting an application (30 days from date of notice) and determination (30 days from receipt of application).
n Information about appeal rights and procedures (include with Determination).
n Forms include:
m Notice of Claim for Medical Assistance in Decedent’s Death (DHS-4934).
m Application for a Waiver of Claim (DHS-4933).
m Determination of Waiver Request (Requestor) (DHS-4935A).
m Determination of Waiver Request (Attorney) (DHS-4935B).
l Undue Hardship.
Any person entitled to a notice of the claim has a right to apply for waiver of the claim based on undue hardship.
n A claim may be fully or partially waived if hardship is determined.
n Recovery may be deferred when undue hardship is determined.
n The personal representative of the client may file a lien against the property in the estate up to the amount of MA expenses to be satisfied when the property is sold or criteria for undue hardship is no longer met.
n Any waiver of a claim must personally benefit the individual person claiming undue hardship.
n Undue hardship does not include action taken by the decedent which divested or diverted assets in order to avoid estate recovery.
n Forms include:
m Determination of Waiver Request (Requestor) (DHS-4935A).
m Determination of Waiver Request (Attorney) (DHS-4935B).
n Review and consider all of the following factors when determining hardship:
m The estate claim could not be paid except by the sale of assets (real or personal property), subject to probate proceedings, for which the following statements are true for a period of at least 180 days prior to the date the decedent died and continue as true:
o The assets are used by the waiver applicant to produce income in his or her trade, profession, or occupation (trade, profession or occupation include a working farm that the waiver applicant actually operates, but does not include a farm that is not worked by the applicant, or a farm that is rented).
o The assets are a necessary part of the waiver applicant’s trade, profession or occupation.
o The trade, profession or occupation in which the assets are used is the waiver applicant’s sole source of income, and
o The waiver applicant has worked continuously and exclusively in the trade, profession or occupation in which the assets are used.
m The estate claim could not be paid except by the sale of the decedent’s real estate subject to probate proceedings and the following are true:
o The waiver applicant actually and continuously occupies the real estate as his or her only dwelling place for at least 180 days prior to the date the decedent died and continues to occupy the dwelling; and
o The real estate for which the hardship waiver is requested was classified as homestead property for property tax purposes under Minnesota Statute § 273.124 throughout the entire period of time referred to in the prior paragraph.
m Other compelling circumstances
l American Indians: Income, Resources and Property Exempt from Estate Recovery.
The federal agency has established standards for hardship that exempt certain assets and resources of American Indians from estate recovery.
n Certain American Indian income and resources (such as interests in and income derived from Tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the U.S. Claims Court) that are exempt from Medicaid estate recovery by other laws and regulations;
n Ownership interest in trust or non-trust property, including real property and improvements for any of the following:
m Located on a reservation (any federally recognized Indian Tribe’s reservation, Pueblo, or Colony, including former reservations in Oklahoma, Alaska Native regions established by Alaska Native Claims Settlement Act and Indian allotments) or near a reservation as designated by the Bureau of Indian Affairs See the MinnesotaCare Health Care Reform Waiver Annual 2003 Report, Attachment D3 (Reservation Map/Contract Health Service Delivery Areas).
m For any federally-recognized Tribe not described in (a), located within the most recent boundaries of a prior Federal reservation.
m Protection of non-trust property described as on or near a reservation is limited to circumstances when it passes from an Indian to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as members of a Tribe and non-Indians, such as spouses and step-children, that their culture would protect as family members; to a Tribe or Tribal organization; and/or to one or more Indians.
n Income left as a remainder in an estate derived from property protected in item 2 above, that was either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indian(s), as long as the person can clearly trace it as coming from the protected property;
n Ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish, and shellfish) resulting from the exercise of Federally-protected rights, and income either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indian(s) derived from these sources as long as the person can clearly trace it as coming from protected sources; and
n Ownership interests in or usage rights to items not covered above that have unique religious, spiritual, traditional, and/or cultural significance or rights that support subsistence or a traditional life style according to applicable Tribal law or custom.
Counties may recover the following income, resources and property from the estates of American Indians:
n Ownership interests in assets and property, both real and personal, that are not described as exclusions above.
n Any income and assets left as a remainder in an estate that do not derive from protected property or sources described as exclusions above.
l Collection Procedures.
When recovery is not waived because of undue hardship and heirs wish to satisfy the recovery claim without a non-liquid asset subject to recovery, the county may establish a reasonable payment schedule subject to reasonable interest.
The county agency may file an estate claim with a court of appropriate jurisdiction when all of the following criteria are met:
n The client dies after the age of 55.
n The estate is opened, regardless of the estate’s value.
n The client received MA, QMB, SLMB or QI or Alternative Care (services provided on or after July 1, 2003).
An estate claim may be filed but not collected when one or more of the following estate claim exemptions exists. The approved claim would not be collected until after the individual dies or the exemption no longer exists. A lien may be filed on property for later collection when the exemption no longer exists. The exemptions are:
n A surviving spouse.
n A surviving child under age 21.
n A surviving child, of any age, who is blind or totally disabled using MA disability determination criteria.
n The estate is opened in tribal court for an enrolled band member. Consult with your county attorney to determine whether a claim can be filed on the estate.
The following policy indicates the maximum amount of an estate claim in different situations:
n For a client who received MA, QMB, SLMB or QI after turning age 55, the maximum estate claim is the total amount of MA, QMB, SLMB and QI paid, without interest.
Note: This is regardless of whether the client received hospital or long-term care services.
n The age for estate recovery was lowered from age 65 to 55 on July 1, 1995. For people who were between ages 55 and 64 on July 1, 1995, the estate claim recovery is limited to MA, QMB, SLMB and QI services received on or after July 1, 1995.
n For a client who died before turning age 55 who resided in a medical institution for six months or longer without reasonable expectation of discharge home, the maximum estate claim is the total amount of MA, QMB, SLMB and QI paid, without interest.
Note: Discharge home does not include medical leave days or visitation to a home per plan of treatment.
Estates which are subject to recovery are:
l The surviving spouse did not receive MA.
Limit the estate claim to the value of the assets of the estate that were marital property or jointly owned property at any time during the marriage, up to the maximum amount of the estate claim.
l The client was institutionalized and a child resided in the homestead, provided care which permitted the client to live at home for at least two years immediately before the client’s LTCF admission, and has resided in the homestead continuously since the date of the deceased client’s institutionalization.
Limit the estate claim to the value of non-homestead property up to the maximum estate claim. A lien should be filed by the personal representative of the client against the homestead property in the estate for any unpaid balance of the claim to DHS.
Property held in life estate or joint tenancy established on or after August 1, 2003, continues after the death of the recipient. Recovery is limited to the recipient's interest on the date of death as determined by the Life Estate Mortality Table.
l The client was institutionalized and a sibling resided in the homestead for at least one year before the client’s institutionalization and continuously since the date of the deceased client’s institutionalization.
Limit the estate claim to the value of non-homestead property up to the maximum estate claim. A lien should be filed by the personal representative of the client against the homestead property in the estate for any unpaid balance of the claim to DHS.
Property held in life estate or joint tenancy established on or after August 1, 2003 continues after the death of the recipient. Recovery is limited to the recipient’s interest on the date of death as determined by the Life Estate Mortality Table.
Counties may use an Affidavit of Collection of Personal Property instead of filing an estate claim. A client must meet all of the following conditions to have the affidavit filed:
l The client has been dead for at least 30 days.
l The estate has not been opened.
l The assets consist entirely of personal property.
l The value of the estate, less liens and encumbrances is $20,000 or less.
The county must serve the affidavit on the financial institution, person or other entity holding the client’s money or property, including the contents of a safe deposit box.
Note: For funds held in a joint or pay on death account, the affidavit must contain the amount of the county’s claim and a good faith estimate of the extent to which the deceased client was a contributor or beneficiary of the funds in the account.
The institution, person, or other entity receiving the affidavit is only obligated to turn over the deceased client’s money or other property still in its possession when the affidavit is served.
Note: The institution is not obligated to turn over funds or property that have already been distributed to the joint owner or payable on death beneficiary.
The lien process is separate from estate recovery.
Pre-death or TEFRA liens are filed by the DHS Special Recovery Unit against the homestead or other real property . Send the Medical Assistance Lien Worksheet (DHS-3203) to DHS when the client meets the following criteria:
l The client, of any age, receives MA while residing in a:
n LTCF.
n ICF/MR.
n Hospital (inpatient).
l The client is expected to remain permanently in the institution.
l The client owns real property that does not meet a lien exemption.
DHS cannot file a lien against real property under any of the following lien exemptions:
l It is a homestead of the person’s spouse.
l It was the client’s homestead at the time the client entered the facility and any of the following people now live in the property:
n The client’s child who is under 21.
n The client’s child, of any age, who is blind or disabled using the MA disability determination criteria.
n The client’s child, of any age, who meet all of the following conditions:
m Lived in the home for at least two years before the client began receiving institutional care.
m Provided care that allowed the client to remain in the community.
m Has lived in the home continuously since the client entered the institution.
n The client’s sibling who meets all of the following conditions:
m Has an equity interest in the homestead.
m Resided in the home for at least one year before the client began receiving institutional care.
m Has lived in the home continuously since the person entered the institution.
l The income, resources and/or property meet an exemption for American Indians.
Continue to send DHS the Medical Assistance Lien Worksheet (DHS-3203) for life estates and jointly owned interest in land, regardless of the date created.
Note: Liens filed on life estates and jointly owned interest in land, created prior to August 1, 2003 are unenforceable. DHS will not file individual releases of these liens after the client’s death as the 2005 legislation did this for all liens meeting the criteria.
Note: DHS will continue to file liens and make recoveries on life estates and jointly owned interest in land, created prior to August 1, 2003 during the lifetime of the recipient.
Liens filed on or after August 1, 2000 expire 10 years from the date of filing. DHS can renew the lien for an additional 10 year period from the date it would otherwise expire.
Note: Liens established prior to August 1, 2000 expire 18 months after DHS is notified of the client’s death. If DHS is not notified of the client’s death the lien expires three years from the client’s date of death.
Rules for estate recovery and liens differ from one another for the GAMC program. Refer to the appropriate subsection for detailed policy to determine if an estate claim and/or a lien should be filed.
The county also has two options for estate recovery for GAMC, as it does for MA.
l An estate claim.
l An Affidavit of Collection of Personal Property.
The county agency may file an estate claim with a court of appropriate jurisdiction. The amount of the claim is the total amount of GAMC paid without interest. The estate claim can be filed when an estate claim exemption is not met and:
l A GAMC client dies.
l A GAMC client dies and then the surviving spouse, who also received GAMC, dies.
l A GAMC client dies and then the surviving spouse, who did not receive GAMC, dies.
Note: The amount of the claim in this situation is limited to the value of the assets of the estate that were marital property or jointly owned property at any time during the marriage.
An estate claim is not filed if there is one or more of the following estate claim exemptions:
l A surviving spouse.
l A surviving child under age 21.
l A surviving child, of any age, who is blind or totally disabled using MA disability determination criteria.
The county may use an Affidavit of Collection of Personal Property instead of filing an estate claim under the same conditions as for MA.
A client must meet all of the following conditions to have the affidavit filed:
l The client has been dead for at least 30 days.
l The estate has not been opened.
l The assets consist entirely of personal property.
l The value of the estate, less liens and encumbrances is $20,000 or less.
The county must serve the affidavit on the financial institution, person or other entity holding the client’s money or property, including the contents of a safe deposit box.
Note: For funds held in a joint or pay on death account, the affidavit must contain the amount of the county’s claim and a good faith estimate of the extent to which the deceased client was a contributor or beneficiary of the funds in the account.
The institution, person, or other entity receiving the affidavit is only obligated to turn over the deceased client’s money or other property still in its possession when the affidavit is served.
Note: The institution is not obligated to turn over funds or property that have already been distributed to the joint owner or payable on death beneficiary.
There are no lien provisions for GAMC.