Skip to main content

Oregon State Flag An official website of the State of Oregon »

Oregon Department of Human Services Search Site

Estate Recovery

What is estate recovery?

When a person who got Medicaid services or General Assistance dies, their estate may be required by law to pay back certain benefits they received. This is called “estate recovery.” About 60 percent of the money goes back to the State to pay for services and benefits for Oregonians. The rest goes back to the federal government for their share of the benefits that were paid.

If you are 55 or older and get Medicaid services or General Assistance, review this brochure and share it with your family or the person who will manage your estate.

Estate Recovery Program brochureEspañol简体中文繁體中文ខ្មែរ&한국어Русский

First steps after death

Losing a loved one is difficult. It can be even more complicated if your loved one got care through Medicaid. The law may require the Oregon Department of Human Services (ODHS) and the Oregon Health Authority (OHA) to recover money spent for their care. This money comes from their estate.

We are here to help guide you through this process:

  1. If your loved one got care through Medicaid, you should first notify their caseworker. If you don't know who their caseworker is, contact us. You may also want to notify Social Security and any pension funds.
  2. After you notify us, you should expect to get a letter in the mail within 60 to 90 days. Don't spend any of the estate's money until you speak to our staff or a lawyer.
  3. Consider gathering the following, if possible:
    • Bank statements from the date of death
    • Funeral receipts
    • Proof of any estate expenses
    • Annuity or pension documents
    • Trust documents
    • Real property information, such as the most recent mortgage statement or deferred tax account information
    • Copy of their will
    • Contact information for your lawyer
  4. Read the frequently asked questions below for general information. (The answers are based on laws and rules that were current when this page was published. These can change without notice.)

Frequently asked questions

Your loved one may have money in a financial institution, such as a bank or credit union​. You sh​ould con​tact us ​before spending any of this money. Banks and medical facilities are asked to send the decedent's remaining funds ​to the State, except when their spouse is still alive.

Do I need to close any bank accounts? Do I need proof an account is closed?​

No, you don't need to close the deceased person's bank accounts.

If you do close an account, keep all the account statements from the date of death until the date the account is closed. The State requires proof of how much money was in the account at the date of death and how any money was spent after the date of death. You may be personally responsible for any misused funds.

Can I pay a claim from my own funds using a check or credit card?​

Yes. But you are not required to pay using your own money unless the funds in your account belonged to your loved one.​

The bank won't let me have my loved one's funds because I'm not an account owner. What should I do?

If the account is solely owned by the decedent, we may be able to request the funds directly from the bank as a creditor of the estate.

If the bank will not release funds to us, you may have to get 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 you need to file will depend on how much money is in the bank account and the value of any other property or assets. By law, you have to notify the Estate Administration Unit (EAU) when this paperwork is filed with the court.

You may face personal liability to creditors if you mishandle your loved one's funds. Since this is a complicated area of the law, consider talking to a lawyer before filing anything with the court.

EAU will file its claim, if it has one, with the personal representative ​and the court. Any assets in the estate must be used to pay claims submitted by creditors of the deceased.

If you don't file a probate proceeding, then the bank may send the funds directly to us if we file an affidavit. For more information see Oregon Revised Statutes 708A.430 and 723.466.

My loved one had multiple accounts. Can I send just one payment, or do I need to send a separate payment for each account?

​You can 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 was closed. ​

The money from a bank account has already been sent to the heirs and nothing is left. What do I do?

The heirs will have to return enough funds to pay the claims of the deceased's creditors.

What happens if I send you all the money in my loved one's account and then I get a bill from a creditor?

If there are no other assets, 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 didn't mishandle the funds, you generally are not responsible for bills or debts if the estate can't pay the creditor. For more information, see Oregon Revised Statute 115.125.

What happens if I sent you all the money in my loved one's ​bank account and then Social Security or a pension company asks for money back?

If​ Social Security asks for reimbursement, contact us.​

A reclamation by a pension fund has lower priority than a claim by ODHS or OHA, so it is unlikely we will reimburse the pension fund. We will confirm that we claimed the funds and that our claim has priority.​

​You can use your loved one's money to pay for costs related to a “plain and decent" funeral. This may be up to $3,500. Funeral costs are considered “burial related expenses." For more information, see Oregon Administrative Rule 461-135-0833.

What are burial related expenses?

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. Costs related to a memorial service may be allowed.

Things that are not considered burial related expenses include:

  • Transportation of the remains beyond the state of Oregon
  • Donations to charities in your loved one's ​​name
  • Transportation of family members to attend funeral or memorial services
  • Other expenses, like utility and medical bills

How much of ​my loved one's money can be used to pay for burial related expenses?

Up to $3,500 can be spent on burial related expenses.

If your loved one had any prepaid burial funds, life insurance policies specifically for burial expenses, or burial insurance, then the amount you may spend is ​reduced by the amounts of those items.

For example, if your loved one had a prepaid cremation plan for $725 with a funeral home, you may spend up to $2,775 of their money on additional burial expenses. This creates a total of $3,500.​

An income cap trust (ICT) is a special type of trust. It allows someone with too much income to qualify for Medicaid long-term care services.

What happens to income cap trust assets when the person who received services passes away?

If you are the trustee of an ICT, you are required to pay back any medical benefits your loved one received, using any funds left in the ICT. We will mail you a letter ​requesting reimbursement and a copy of a bank statement for the date of death. You should expect the letter about two months after your loved one's death.

If any funds are left over after paying back the State, you should distribute those funds according to the terms of the trust.​

Can I pay funeral or burial related expenses out of an income cap trust?

No. If you don't reimburse the State first, you may be liable for any money that was spent improperly.

Can I close the income cap trust after the person who received benefits passes away?

Once you have reimbursed the State, you should distribute any remaining funds according to the terms of the trust.

Consider getting expert help, like a lawyer. You may want to check with Social Security to see if they will try ​to reclaim any funds before closing the ICT.

​Real property is a specific type of property that includes land and buildings on land. If your loved one owned an interest in real property, the estate may have to sell it in order to pay creditors' claims, including ones from the State. If you​ inherit the property, you are usually allowed to pay the claim instead of selling the property.

Did Medicaid place a lien on my loved one's real property?

No. However, the equity in the real property may still be open to an estate recovery claim for some or all public benefits your loved one received.

You may see a Request for Notice (RFN) on the real property. This is not a lien. An RFN requires a title company to notify the Estate Administration Unit (EAU) when the property is being sold or used as collateral on a loan. An RFN is placed on real property when one or all of the owners receive Medicaid long-term care benefits.

Will the State take my loved one's home after they pass away?

No. However, the home will usually be part of the deceased person's estate. This means the home may have to be sold to pay creditor's claims, including ones from the State. This is a complicated area of the law. Consider getting advice from a lawyer.

Typically, when a Medicaid recipient passes away, the EAU 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 wants to sell the home, the Medicaid claim may be paid when the home is sold. If the family wants to keep the home, they may be able to pay the State's claim in other ways, such as getting a mortgage. The State can only collect the lesser of either the claim amount (including any interest) or the value of the home.

The State will not require you to sell the home. However, if that is the only way to pay the claim, it may be necessary to sell the home. There may be other options, including borrowing money from a commercial lender.

What if my loved one owned property with other people?​

The type of co-ownership will determine how estate recovery moves forward. Usually, only the Medicaid recipient's share of the property will be open to a claim ​for recovery. However, there are many exceptions to this rule.

This is a complicated process. Consider getting advice from a lawyer.

My loved one had a will that states who inherits the assets. Can Medicaid still make a claim against the property?

Yes. Even with a will, creditors are given a chance to seek payment before assets are distributed to heirs.​

What happens if I sell my home or land while I’m getting Medicaid long term care services?

You are required to tell the State of any changes. You should speak with a caseworker at a local O​DHS office.

Am I allowed to give my home or land to my children while I’m living?

This is a complicated process. Before you give away your home or land, consider getting advice from a lawyer and check with your caseworker at a local ODHS office.

Do I have to repay my spouse's Medicaid benefits?

Usually, no. In most cases, the State will not make a claim against the estate until after the surviving spouse passes away. However, certain types of trusts may have to repay Medicaid.

The State also won't seek repayment if the person who passed away has a surviving child who is under 21 years old, or a child of any age who is blind or disabled (using the Social Security Administration'​s disability criteria). The child must be the person's natural or legally adopted child.

Also, if your spouse got any benefits they were not eligible to receive, the estate may have to repay those benefits. This is called an overpayment. If you have questions, talk to a caseworker at your local ODHS office​.

​As the surviving spouse of a Medicaid recipient, can I keep living in our ​home?

Yes. You are not required to sell your home. The Medicaid claim is usually not collected until you pass away. However, you can voluntarily repay Medicaid at any time.​

Contact us

Our staff can't give legal advice.
Talk to a lawyer if you have legal questions. If you can't afford a lawyer, your local legal aid office may be able to help.