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How Minnesota Medicaid benefits may affect probate proceedings

On Behalf of | Sep 1, 2023 | Claim On The Estate |

The main parties interested in probate proceedings in Minnesota are usually the beneficiaries of an estate and the person serving as the personal representative or executor of that estate. The closest friends and family members of the individual who passed may expect to inherit resources from their estate. The court officials overseeing the case don’t have a direct interest in the estate itself but merely in ensuring that the personal representative abides by the instructions in the estate plan and complies with state law. There could potentially be outside parties, including businesses and government agencies, that also have an interest in a Minnesota estate.

One of the important requirements during the probate process involves communicating with creditors and properly fulfilling someone’s financial obligations, including paying their final tax bills. What some people do not realize is that there is yet another outside party that could have a major interest in an estate if the decedent used Medicaid coverage prior to their passing.

Medicaid will pursue an estate claim for repayment

In Minnesota, the medical benefits available through Medicaid can help people with limited income and personal assets pay for their treatment. Medicaid benefits will cover care that Medicare will not, including the cost of living in a nursing home. Beneficiaries can live in a nursing home that charges thousands of dollars each month even if their retirement savings are nowhere near enough to cover those costs.

When the recipient of those benefits dies, the Medicaid estate recovery program will pursue a claim in probate court to recover the full value of the benefits paid out on that party’s behalf. The courts can potentially order the liquidation of assets, including the sale of the decedent’s primary residence, to pay for the Medicaid coverage they received.

Some aging adults are very proactive about minimizing Medicaid challenges. They protect their beneficiaries by planning ahead to shield certain assets and improve their chances of qualifying for Medicaid quickly. Without advance planning, Medicaid can have a major financial impact on the total value of an estate. Learning more about the circumstances in which the value of an estate may drop significantly can benefit those expecting to inherit from an estate or administer one.