People worry that if they end up in an assisted living facility, because family can no longer care for them at home, that their home will be sold to pay for their care and any family members living with them will end up on the street. Thankfully, there are some exceptions to TennCare’s estate recovery rules.

What is TennCare’s “Estate Recovery”?

“Estate recovery” is when Medicaid (TennCare) seeks to be reimbursed for monies it has paid out for a person’s care, for assisted living and some other types of care. When a person’s estate is probated, beneficiaries cannot be paid any inheritances until TennCare has been reimbursed. But what happens if a family member was living with the TennCare recipient? Will they be forced out of the home so it can be sold to pay TennCare what it is owed?

Exception to the TennCare Estate Recovery Guidelines: Undue Hardship

Here’s some important information from the TennCare website:

TennCare will not recover from an estate when the estate shows that it meets the criteria for an “undue hardship” exception. The “undue hardship” is defined by Tennessee as existing in the following three circumstances:

1. The property of the estate is the sole income-producing asset of the survivors, such as a family farm or other family business.
2. A sibling of the deceased individual meets the following criteria:
   1. He or she was lawfully residing in the individual’s home at least 1 year immediately before the individual’s admission to the medical institution;
   2. He or she provided care to such individual for that 1 year, which permitted the individual to reside in the home rather than in an institution; and
   3. He or she has lawfully resided in such home on a continuous basis since the date of the individual’s admission to the medical institution.
3. A son or daughter of the individual meets the following criteria:
   1. He or she was lawfully residing in the individual’s home for at least 2 years immediately before the individual’s admission to the medical institution;
   2. He or she provided care to such individual for those 2 years, which permitted the individual to reside at home rather than in an institution; and
   3. He or she has lawfully resided in such home on a continuous basis since the date of the individual’s admission to the medical institution.

Note: For purposes of #2 and #3 above, the undue hardship shall be considered to no longer exist when sibling, son, or daughter of the deceased individual, as applicable, no longer resides in such home.

For any of these undue hardship exceptions to take place, a Request for Release must be submitted to TennCare. TennCare will then determine whether the estate is eligible for the undue hardship exception and, if so, TennCare will file a Release in Probate Court.

Deferred Estate Recovery

In some situations, estate recovery is delayed or “deferred,” which means that it is not pursued until a later date. TennCare defers estate recovery for an individual’s estate when:

• The individual is survived by a spouse; or
• The individual is survived by a child under the age of 21; or
• The individual is survived by a son or daughter who is blind or disabled.

TennCare will not seek recovery from the estate until the spouse dies, until the child under 21 turns age 21, or until the son or daughter who is blind or disabled dies. For this deferral to take place, a Request for Release must be submitted to TennCare, and TennCare must file a Release in Probate Court.

If you have questions about how to plan for assisted living and a Medicaid Asset Protection Trust, please reach out to us. We may be able to help.