TRUTH: The Medicaid Estate Recovery Program (MERP) can make a claim after you pass for repayment of the money it paid for benefits received during life. BUT MERP CAN ONLY RECOVER AGAINST PROPERTY PASSING THROUGH PROBATE. Any property which passes outside of probate – like bank accounts with pay on death provisions – is not subject to MERP.
Lady Bird Deeds pass the homestead outside the probate process and avoid MERP for the biggest resource most Medicaid recipients have at death.
There are also exceptions for property passing by probate including:
- Property passing to the surviving spouse or
- where an unmarried adult child has been living in the home for more than a year prior to the death of the recipient.
For most people, there is a reason for MERP to apply!