Medicaid estate recovery is a complex area of law designed to recoup the costs of long-term care and other medical assistance provided by the state. In Oregon, the Department of Human Services (DHS) and the Oregon Health Authority (OHA) are mandated by federal and state law to seek recovery from the estates of deceased Medicaid recipients.
Under Oregon’s Medicaid estate recovery rules, any claim for your late husband’s Medicaid benefits would have been deferred until after your death. Since the marital home was lost through bankruptcy in 2013, prior to your death, that asset no longer exists within the estate for recovery purposes.
The Oregon DHS does not place a lien on a Medicaid recipient’s home; rather, it files a claim against the estate. If an asset, such as a home, is no longer part of the estate when the deferral period ends (i.e., upon the surviving spouse’s death), it cannot be subject to recovery. Therefore, Oregon would not be able to recover Medicaid benefits from a home that you lost in bankruptcy.
Inherited Funds and Beneficiary Designations
The funds you inherited funds from your mother in 2024 are your assets. As previously noted, any claim for your late husband’s Medicaid benefits is deferred until after your death. This means that the state cannot currently seek recovery from these inherited funds for your husband’s past Medicaid expenses while you are alive.
Upon your death, the inherited funds (if you still held them at that time), would be considered part of your estate for Medicaid recovery purposes, even if designated to pass to your adult children outside of probate (e.g., through a Transfer-on-Death (TOD) designation, a living trust, or other similar arrangements). Oregon’s expanded definition of “estate” explicitly includes assets conveyed through such mechanisms. Therefore, at the time of your passing, the Oregon DHS could potentially seek recovery from these funds for your late husband’s Medicaid benefits, subject to the amount of benefits paid and any applicable hardship waivers.
While listing your adult children as beneficiaries is a common estate planning strategy to bypass probate, it does not shield these assets from Medicaid estate recovery in Oregon. The state’s broad definition of “estate” allows it to pursue assets that pass outside of the formal probate process.
So while the inherited funds are currently safe from immediate recovery for your husband’s past Medicaid benefits due to the spousal deferral, they could become subject to recovery from your estate upon your death, regardless of beneficiary designations you made with the intention of bypassing probate.
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