Maurice and Giselle had lived on their family farm for over 30 years. Recently,  Maurice suffered a stroke and his doctor told him needed long-term nursing home care. “Finding a nursing home is not the problem, “ Giselle said, when she came to my office.  “There is a nursing home in town where my parents lived for years. Our family was very  happy with the care they received. My concern is finding the money to pay for Maurice’s  care.” 

She started to sob when she said, “I don’t want to lose the farm. It has been in  Maurice’s family for years and we want to leave it our children. I don’t have enough  money to pay for a nursing home for very long and if Maurice applies for Medicaid  benefits, the state will take the farm.” 

Giselle was told by a friend, whose mother was in a nursing home, that she would have to  sell the farm and spend the proceeds on nursing home care before Maurice would qualify  for Medicaid benefits. 

One of her neighbors told her she would not have to sell the farm, but upon  Maurice’s death, the state would take the farm to reimburse itself for the Medicaid  benefits they paid out on Maurice’s behalf. She asked, “What should I do?” First, we told Giselle the good news. “Giselle, you do not need to sell the farm for  Maurice to qualify for benefits.” In Connecticut, the home is exempt if an applicant’s  spouse continues to reside there. 

Second, the state will not take the farm when he dies, but after both Giselle and Maurice  pass away, the state does have the right to recover the benefits paid on Maurice’s behalf.  This process is called “estate recovery.” Please note there are still ways to protect the home. 

Federal law requires each state to recover the cost of long-term care services from  the estates of Medicaid recipients. In other words, each state has the right to make a claim  against and estate of an individual who receives Medicaid benefits. 

In the case of a married couple, recovery cannot be made before the death of the  surviving spouse. So, if Maurice passes away before Giselle, the state will actually make  a claim against Giselle’s estate. 

“Does that mean the state will take the farm after I die; that I cannot leave the farm to my  children?” she asked. 

With the proper estate planning, Giselle may be able to pass the farm to her children. This  may be possible through trust planning, joint tenancy or gifting. 

Unfortunately, it is not enough to simply avoid probate. Federal law actually  allows states to expand the definition of “estate” to include any property an individual  had at his or her death, including joint bank accounts, accounts with pay-on-death  beneficiaries, life estate in real property, real estate held in joint tenancy and property  held in living trusts. So, even non-probate assets are at risk. 

Medicaid estate recovery rules are complicated and vary significantly from state to-state. You should consult an experienced elder law attorney who practices Medicaid  law before drafting any type of estate plan with intent of qualifying for Medicaid with the  

hope of avoiding estate recovery.