Oregon's Medicaid and General Assistance programs pay for health care and other service for our clients. When a Medicaid or General Assistance client dies, we are required by law to recover money spent for their care. Money recovered comes from the "estate" of the client. The Estate Administration Unit begins the estate recovery process when notified of the client's death or when a probate proceeding is filed.
NOTE: Information in this FAQ is based on federal and state laws, and rules, as of its publication date. These laws and rules may change without notice. This brochure is intended to give general information and not detailed advice. Discuss any questions about estate recovery with EAU staff at 1-800-826-5675 or 503-378-2884. EAU staff cannot provide legal advice. If you have legal questions or need legal advice, speak to a lawyer. Your local legal aid office may be able to help.
- If you know the recipient’s case worker then contact the worker (at the local branch). Otherwise contact the Estate Administration Unit. You may want to notify Social Security and any pension funds of the decedent’s.
- You should expect to receive a letter within 60-90days. You may call the Estate Administration Unit at any time. Please note that you should not dispose of any assets until you speak to the Estate Administration Unit or Lawyer.
- Consider gathering the following, if possible:
- Bank Statements from the date of death.
- Funeral receipts. See burial rule for important additional info.
- Proof of any Estate administrative expenses.
- Annuity or Pension documentation
- Trust documents
- Real Property information, such as the most recent mortgage statement or Deferred tax account info.
- Copy of the Will
- Contact information for the Lawyer.
Funeral and Bank Account
- You may use the decedent’s money to pay for expenses related to a “plain and decent” funeral, which may be up to $3500. The Estate Administration Unit considers funeral expenses to be “burial related expenses.” For more information see Oregon Administrative Rule 461-135-0833.
- There is no specific definition of “burial related expenses.” The rule states that it “includes all professional services and merchandise.” Examples are funeral home expenses for things like a casket, or an urn, as well as fees charged by the funeral home. Additionally, costs related to a memorial service may be allowed. See Oregon Administrative Rule 461-135-0833(1).
- The rule specifically does not allow:
- Transportation of the remains beyond the state of Oregon;
- Donations to charities in the decedent’s name;
- Transportation of family members to attend funeral/memorial services; or
- Other similar charges.
- Other expenses, like utility and medical bills are not considered burial related expenses.
- See Oregon Administrative Rule 461-135-0833(4) for additional information
- The rule allows up to $3,500.00 of the decedent’s money may be spent on burial related expenses. Be mindful that if the decedent had any “prearranged funeral trust, funds set aside for burial, life insurance policies specifically identified to pay for funeral expenses, or burial insurance” then the amount of the decedent’s funds you may spend would be reduced by the amounts of those items. For example: if the decedent had a prepaid cremation plan for $725.00 with a funeral home, this means that you may spend up to $2,775.00 of the deceased’s money on additional burial expenses (for a total of $3,500.00). See Oregon Administrative Rule 461-135-0833(2).
- If the account is solely owned by the Medicaid Decedent, we may be able to request the funds directly from the bank as a creditor to the estate. If the bank will not release funds to the Estate Administration Unit, you may have to acquire an affidavit to have the funds released to you. The bank may require you to file a document with the courts called either a “Small Estate Affidavit” or a “Petition to Appoint a Personal Representative.” These are known as “probate” proceedings. The type of paperwork to be filed will depend on how much money is in the bank account and the value of any other property or assets the decedent owned. By law, you will have to notify Estate Administration Unit when this paperwork is filed with the court. You may face personal liability to creditors if you mishandle the funds of the deceased. Since this is a complicated area of the law you should consider consulting a lawyer before filing anything with the courts. The Estate Administration Unit will file its claim, if it has one, with you and the court. Any assets in the estate shall be used to pay claims submitted by creditors of the deceased.
- For more information about Small Estates: Oregon Revised Statutes § 114.505 to 560
- For more information about Probates: Oregon Revised Statutes § 113.035, ORS § 114.255 - 435
- If you do not file a probate proceeding, then the bank or credit union may send the funds directly to the Department if we file an affidavit with the bank or credit union. For more information see Oregon Revised Statutes § 708A.430, 723.466
- You may use the decedent’s money to pay for a “plain and decent funeral.” For more information, check the FAQ for “Burial Expenses.” Also see Oregon Administrative Rule 461-135-0833.
- No, you do not need to close the deceased’s accounts. If you do close an account, keep all statements for the account from the date of the decedent’s death until the date the account is closed. You may need to prove that you used the funds as required by law. Otherwise you may be personally liable for any misused funds. The Estate Administration Unit will require proof of how much money was in the account at the date of death and if any money was spent after the date of death.
- Yes. You are not obligated to use your own money to pay the Department unless the funds in your account belonged to the decedent.
- You may send one payment or separate payments. Please include copies of bank statements for each account from the date of death, to the time of payment or when the account is closed.
- The heirs will have to return sufficient funds to pay the claims of the deceased’s creditors.
- If there are no other assets of the estate, the estate is “insolvent”. If a court proceeding has been filed, the creditor has an option to file a claim through the court proceeding. However, if you did not mishandle the funds of the deceased, you generally are not responsible for bills or debts from the decedent if the estate does not have the ability to pay the creditor. For more information see Oregon Revised Statute 115.125
- Usually a bank will not allow the funds to be disbursed when it knows that the payor is likely to issue a reclamation of funds. If Social Security requests reimbursement contact the Estate Administration Unit for reimbursement. A reclamation by a pension fund has lower priority than a claim by the Department so it is unlikely we will reimburse the pension fund. We will confirm for the pension fund that we claimed the funds and that our claim has priority.
Income Cap Trust Account Related Questions
- An income cap trust (ICT) is a special type of a trust. Its purpose is to allow an individual with too much income to qualify for Medicaid long term care services. (Add Oregon Administrative Rule/ U.S.C.Citation?)
- After the beneficiary passes away the trustee of an income cap trust is required to reimburse the state for any medical benefits received by the beneficiary using any funds left in the income cap trust. If any funds are left over after paying the Department, they should be distributed according to the terms of the trust by the trustee. The Estate Administration Unit will mail a letter to the trustee usually in about 2 months. The letter will request reimbursement and a copy of a bank statement for the date of death.
- No. If the trustee fails to reimburse the state first, the trustee may be liable to the state for any funds that were spent improperly.
- After the state is reimbursed, the trustee should disburse any remaining funds according to the terms of the trust.
- Once a trustee has reimbursed the state, the trustee should disburse any remaining funds according to the terms of the trust. The trustee should consider getting some expert help, such as an attorney.
- The trustee may want to check with Social Security to see if they will seek to reclaim any funds.
Real Property Related Questions
- No. The equity in the real property may still be subject to an estate recovery claim for some or all public benefits you received. Please ask for a copy of our MSC 9093 brochure about estate recovery for more information.
- An RFN is not a lien. It requires a title company to notify the department (Estate Administration Unit) when the property is being sold or used as collateral on a loan. An RFN is placed on real property when one or all the owners receive Medicaid long term care benefits. Oregon Revised Statute 411.694, Oregon Administrative Rule 461-135-0847
- You are required to tell state that you have a change in your financial circumstances. It may affect your future eligibility for benefits. You should speak to an eligibility or case worker (at the local branch) to learn more.
- This is complicated. Generally, giving away assets before applying for Medicaid or receiving Medicaid may result in a period of ineligibility. There are exceptions. Before you give away an asset check with your eligibility or case worker (at the local branch) to make sure you don’t jeopardize your eligibility for Medicaid.
- You are required to notify the state of the change in your financial circumstances because you sold real property. You should discuss this with your eligibility or case worker (at the local branch) before you do anything with money from the sale. Otherwise you may lose Long term care benefits.
- In some case, you may decide to reimburse the state for your past assistance, but you are not required to that.
- The Estate Recovery Unit does not take the recipient’s home. The home will usually be part of the recipient’s estate, so it may have to be sold to pay creditor’s claims, including ours, if any. You should consider obtaining advice from a lawyer since this can be a complicated area of the law.
- Typically, when a client passes away, the Estate Administration Unit will begin working with family members or the estate’s Personal Representative in presenting a Medicaid recoverable assistance claim. Once the state’s claim is presented, the family will have options to pay the state’s claim. If the family wishes to sell the home, the Medicaid claim may be paid upon the sale of the home. If the family wants to keep the home, if they qualify, they may pay the state’s claim through other means such as getting a mortgage. The Estate Recovery Unit can only collect the lesser of the claim amount, including any interest, or the value of the asset.
- If that is the only way to pay the claim it may be necessary to sell the home. There may be other options, such as borrowing money from a commercial lender. In rare cases the Estate Administration Unit may accept installment payments, but will likely require interest on the balance.
- The type of co-ownership will affect how estate recovery proceeds. It is too complicated to cover here, but consultation with a lawyer should be considered. Usually, only the recipient’s share of the property will be subject to a claim for recovery. There are many exceptions to the general rule which we can’t cover here.
- Even with a Will, creditors are allowed the opportunity to seek payment prior to assets being distributed to heirs. Medicaid’s claim may be asserted against the assets.
Surviving Spouse Related Questions
- Usually, no. EAU’s claim is usually not enforceable until after the surviving spouse passes away.
- Certain types of trusts may have to repay Medicaid.
- Their probate estate may have to repay benefits that they were not eligible to receive. This is called an overpayment.
- You might be liable if we determine that you participated in certain unlawful activities. The best way to avoid this is to be sure you fill out an application completely and accurately. If you have questions, ask a case worker (at the local branch).
- The surviving spouse of a Medicaid recipient is not required to sell the home. The Medicaid claim is usually not enforceable until after the surviving spouse passes away.
- You may voluntarily repay Medicaid. It is not required during your lifetime.
- If you are receiving Medicaid benefits you are required to notify the Department of any change in your financial affairs within 10 days.