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June 11, 2012

Expanded Medicaid Recovery Law Repealed

Last year the New York Social Services Law was amended to expand the definition of a medicaid estate subject to recovery by the Department in reimbursement for nursing home care beyond the traditional decedent's probate estate. The expansion would have affected non-testamentary transfers such as life estate deeds and jointly held property. Conveyances of remainder interests and other property interests which would not result in immediate possession until after the death of the transferor were suddenly clouded with liens against the preceding life interest or joint interest if that person received Medicaid during his or her lifetime.<> The new news is that the expanded recovery law has been repealed effective December 6, 2011. This means that the recovery law has been restored to its previous probate estate limitation. The Social Services Department is limited to filing a collection lien in the Surrogate Court of the County where the dededent's probate took place.<> As a result of the foregoing, holders of remainder interests under deed transactions where the grantor reserved a life estate should not have to worry about a collection lien when the life tenant dies.<> Our 2011 Expanded Medicaid Recovery article is superceded by this law change.