New Jersey Gets Aggressive with Estate Recovery (Part 3)

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Administration Defense Attorney

In Part 2 of this series I discussed a case involving the filing of a priority lien for reimbursement of Medicaid benefits paid to a beneficiary prior to death. In this post I will continue the discussion by examining the N.J. regulations a bit deeper.

N.J. has adopted regulations to comply with the federal estate recovery requirements. N.J.A.C. 10:49-14.1(d) authorizes DMAHS to “file any claim or lien against an estate within three years after receiving actual written notice from the personal representative of the estate or any other interested party of the death of the Medicaid beneficiary.” N.J.S.A. 30:4D-7.2(a)(3), N.J.A.C.10:49-14.1(1) defines “estate” as follows, in pertinent part:

1) The term “estate” with respect to a deceased Medicaid beneficiary shall include:

1) All real and personal property and other assets included within the individual’s estate, as defined in N.J.S.A. 3B:1-1; and

2) For individuals who died on or after April 1, 1995, the term “estate” shall also include any other real and personal property and other assets in which the Medicaid beneficiary had any legal title or interest at the time of death, to the extent of that interest, including assets conveyed to a survivor, heir or assign of the beneficiary through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement, as well as any proceeds from the sale of any such property which remain in the state of the survivor, heir or assign of the beneficiary, to the extent of the beneficiary’s interest.

In this case after the death of his spouse, the County Board of Social Services (CWA)inquired as to whether the family would elect a spousal share against his late spouse’s estate. The family responded that the elective share statute did not apply. Consequently, the CWA notified the family that Medicaid benefits would terminate. The CWA also notified them that the surviving spouse had twenty days to request a fair hearing. If he appealed his Medicaid benefits would continue until a final decision was rendered, though the appellant could required to repay any Medicaid benefits to which he was not entitled.

The state in this case claimed that the family by waiving the spousal elective share rights qualified as a transfer of an available asset subjected to a penalty period of ineligibility. The CWA relied on N.J.A.C. 10:71-4.10, which provides as follows, in pertinent part:

(a) An individual shall be ineligible for institutional level services through the Medicaid program if he or she (or his or her spouse) has disposed of assets at less than fair market value at any time during or after the 60 month period immediately before.

(b) Assets shall also include income and resources which the individual or the individual’s spouse is entitled to but does not receive because of action or inaction by the individual or the individual’s spouse.

In my fourth and final post of this series, I will tie the case and the regulations together for a full understanding.

To discuss your NJ Estate Recovery matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.

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