How Michigan’s Medicaid Estate Recovery Program Works (2026)
What is Michigan’s Medicaid Estate Recovery Program and How Does it Work?
Michigan’s Medicaid Estate Recovery program allows the state to recover the expenses that it paid for long-term care from the estates of individuals over the age of 55 who received Medicaid assistance during their lifetime. The program seeks to recover the entire amount paid on behalf of a Medicaid beneficiary for the benefits provided to them in a nursing home, through MI Choice Waiver, through the Program of All-Inclusive Care for the Elder (“PACE”), or through Adult Home Help Services and Home Help programs. Importantly, the program only attempts to recover expenses after the death of the Medicaid benefits recipient, and the program is only able to reach certain assets.
Which of the Deceased Medicaid Beneficiary’s Assets Can the Estate Recovery Program Reach?
Michigan’s Medicaid Estate Recovery program is narrow in that it only allows the state to recover from the assets in the deceased Medicaid beneficiary’s probate estate. A person’s probate estate consists of the property that they owned in their name alone and that did not have a designated beneficiary. This includes any property set to pass under a person’s will.
An all-too-common case of Medicaid estate recovery involves the state attempting to recover from a Medicaid beneficiary’s former home after they die. Since Michigan’s Medicaid program allows the home to be an exempt asset in terms of eligibility, Medicaid beneficiaries frequently receive benefits while still owning their home during their lifetime. However, at the time that they pass away their home can fall into their probate estate. As soon as probate starts, Michigan’s Medicaid Estate Recovery program presents their bill — often in the hundreds of thousands of dollars — and the home must be sold to satisfy Medicaid’s claim. Family and friends receive a fraction of their inheritance while Medicaid eats up the lion’s share. Note that it’s not just the home that may be subject to recovery. The person’s entire probate estate is responsible for paying Medicaid’s claim. The home is just typically the most valuable asset and the only asset that can come close to paying the claim if liquidated.
Almost everybody will leave behind a probate estate at the time that they pass away unless they consciously and purposefully plan to avoid probate during their lifetime.
It is worth noting briefly that the legislature has created a handful of “hardship” exceptions to the estate recovery program; however, these hardship exceptions can be extremely difficult to secure and are an unreliable means of delaying or avoiding estate recovery.
Is There a Way to Plan for and Avoid Michigan’s Medicaid Estate Recovery Program?
Yes — skilled estate planning attorneys frequently help people plan to avoid Michigan’s Medicaid Estate Recovery Program. The key to avoiding the program entirely is to make sure that the individual carefully plans to leave their property to their intended beneficiaries without subjecting their estate to probate. An estate recovery claim, unlike other claims, cannot be asserted against property that passes outside of probate by trust or otherwise. In other words, no probate estate, no Medicaid recovery.
An appropriate plan involves a careful examination of the individual’s goals, their intended beneficiaries, and their property. Each plan should be unique; purposefully designed to maximize the planner’s independence and security during their lifetime while also securing the long-term wealth and wellbeing of their family and friends after they pass.
Experienced estate planning attorneys have a handful of ways to plan for passing on an inheritance without the disastrous consequences of probate. If you’re interested in discussing Michigan’s Medicaid Estate Recovery Program or options for avoiding probate, please call Kimball & Wells for help. Our firm specializes in estate planning, and we pride ourselves on creating lasting, meaningful relationships with our clients. We are located in Grand Rapids, and we offer a free consultation to discuss how best to achieve your goals. We’ll advise you on the best and most cost-effective means to make sure you and your family are cared for. To get started, call us at (616) 317-8489 or click the “Contact Us” link on our website.
Wyatt J. Wells
Kimball & Wells, PLLC
Wyatt@kimballwells.com
(616) 317-8489