You may know about the MassHealth estate recovery process. MassHealth can recoup costs they spent on your long-term care by taking your assets from your heirs after you pass away.
No matter how well you plan and spend down your assets to qualify for MassHealth, your estate could still be at risk of recovery, depending on the situation. This can be incredibly stressful for you and your heirs who you want to protect.
Delaying recovery
Fortunately, estate recovery can be delayed or even waived in certain situations. If your estate is subject to the estate recovery process, the recovery will be delayed if you have a surviving spouse, a surviving child under 21 years of age or a surviving child of any age who is disabled or permanently blind.
The delay typically lasts until the reason for the delay is no longer in effect. For example, when your surviving child turns 21 or your surviving spouse passes away.
Additionally, your home will generally not be subject to estate recovery if there are family members still living there after you pass away.
Sometimes a delay might not be enough. Your heirs could qualify for a MassHealth hardship waiver if they:
- Had income near or below the federal poverty level two years while living in your home. Technically, this applies if your income was 133% of the federal poverty level.
- Had income below 400% of the federal poverty level for two years
- Provided care to you for two years while living in your home
There may be some additional criteria to meet to qualify. However, if the criteria are met, there are three potential MassHealth undue hardship waivers that could be available.
Three types of hardship waivers
The three waivers are a care provided waiver, an income-based waiver and a residence and financial hardship waiver. The purpose of these waivers is to prevent your assets from being taken from your heirs because without them they would suffer undue financial hardship.
There is no specific definition of undue financial hardship, but it generally means a situation where it will be difficult or impossible to meet basic living expenses without the asset or where an heir will be in danger of imminent homelessness if they lose an assets such as a home.
Generally, if an heir does not qualify for the residence and financial hardship waiver, they can apply for the care provided waiver. If they do not qualify for the residence and financial hardship waiver and the care provided waiver they can apply for the income-based waiver.
Approval of any of these types of waivers typically waives the entire MassHealth estate recovery claim.
Applying for a hardship waiver involves filing out a form and submitting specific documentation. Some examples of documentation include a copy of your will, a list of probate inventory, income documentation and various other probate court forms.
Preserving a home
Many hardship waivers are filed to prevent the forced sale of a home. These waivers require submitting documentation related to the home such as a deed.
When trying to save a home, an heir must also sign an affidavit swearing that they still live in the home, they inherited an interest in the home, the sale of the home is required to satisfy the claim and various other statements.
If you believe an heir might qualify for a hardship waiver, it is best to research the requirements and start getting documents together. The application can get complicated but a successful waiver can protect your assets you want to preserve for your heirs.