It is hard enough losing a parent, but to have the state come after your inheritance afterwards can make an already difficult time that much more traumatic. That is what is happening to one Michigan family who is learning that their mother’s will doesn’t matter to the state as it tries to enforce the Estate Recovery Law. Since last year the state has been attempting to enforce this law, which allows the state to recover taxpayer money from individuals who receive long-term Medicaid care.

Two siblings were listed on their mother’s will and were to inherit the house their mother had lived in since 1950, but the state of Michigan wants it. The state went to the probate court and put a lien on the house. A lien is a claim to property to settle a debt. According to a report, the state wants $35,000 because their mother spent the last year of life in a nursing home, which was covered under Medicaid.

The state is simply trying to recover money any which way it can, looking in the proverbial seat cushions for loose change. Other states have similar laws, but have only recovered less than 1 percent of the costs of long-term care. It appears this is not a valid solution for solving the nation’s long-term care dilemma. The state can only attempt to recover money from estates cases that go through the probate courts.

Through the use of trusts you can avoid probate court and preserve your family’s assets and properties. It requires planning ahead of time because you cannot implement a trust after the property owner has died. An estate planning attorney can help guide you through the requirements for setting up a comprehensive estate plan that includes a trust, powers of attorney and any health care proxies or living wills your family may need.

A trust is a legal entity in which you place the title of a property. Because the trustee, not the actual property owner or person who created the trust, holds the title to the property in the trust it can pass to the beneficiary without requiring the probate process. A revocable trust allows the person who creates the trust to access or make changes to that trust during his or her lifetime. Just as if the trust holder owned the property outright. When the trust holder dies the trust document directs the trustee on how to distribute the property.

The Michigan family has appealed the state’s lien and is awaiting a hearing, which may be the first of its kind since the state began enforcing the Estate Recovery Law. The law allows for hardship exemptions; however the family was told it does not apply in their case.

Source:, “Family may lose home to Estate Recovery,” Henry Erb, Mar. 27, 2012

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