Medicaid Estate Recovery

Financial Planning

A federal-state program that lets Medicaid recover the cost of long-term care benefits from a recipient's estate after death.

Medicaid estate recovery is the requirement that states seek reimbursement from a deceased Medicaid recipient's estate for long-term care benefits paid during life. In Arizona, the program is administered through ALTCS.

Arizona's Limited Recovery

Arizona only recovers from the probate estate. Assets that pass outside of probate, such as those held in a properly funded living trust, transferred by beneficiary deed, or held in joint tenancy with right of survivorship, generally are not subject to recovery.

Hardship Waivers

Recovery can be waived or delayed when a surviving spouse, a minor child, or a disabled child still lives in the home. AHCCCS reviews hardship requests on a case-by-case basis.

Planning to Limit Exposure

Trust funding, beneficiary deeds, and irrevocable Medicaid asset protection trusts can all reduce or eliminate the probate estate available for recovery. Timing matters: transfers made too close to a Medicaid application can be disqualified during the lookback period.