Massachusetts Law Now Limits Medicaid Recoveries from Decedents’ Estates

One often overlooked element of estate planning is developing a strategy to fund long-term care if the need arises when you get older. Given the high cost associated with long-term care, many Bay State residents have relied on MassHealth, the state’s Medicaid program, to fund the treatment they require either at home or in a residential facility. 

For many years, Massachusetts law mandated that after the death of a MassHealth beneficiary, the expenses paid on their behalf be recovered from their estate, often well beyond the amount required by the federal government. This caused serious financial hardship for many families, some of whom were prevented from receiving the legacy they expected or were forced into selling the family home.  

A law passed in 2024 changed this. Under the new legislation, Massachusetts now aligns its estate recovery program with the federally mandated minimum, a shift that limits the scope of recovery and protects more families against financial hardship. Additionally, the law exempts residents receiving assistance under CommonHealth and personal care attendant services from estate recovery altogether.  

For many Massachusetts families, these changes provide much-needed financial relief. By limiting estate recovery to the federally mandated minimum, the state ensures that fewer families will face the loss of their loved ones’ homes and assets. This is particularly impactful for middle- and low-income families who rely on MassHealth for long-term care services.

While this reform is a step in the right direction, sound estate planning remains essential for safeguarding your legacy and ensuring your family’s financial security. One option is a Medicaid Asset Protection Trust. You can shift your assets into this type of irrevocable trust and retain eligibility for MassHealth benefits. Assets in the trust could not be clawed back during or after your life. However, due to the statutory lookback period, someone who creates this type of trust cannot take advantage of it for at least five years. Accordingly, it is essential to think about setting up the trust long before you might require long-term care.  

Chapdelaine, Ryan & Associates offers comprehensive counsel on estate planning matters and keeps track of the latest legal developments. For a consultation with an experienced attorney regarding your particular legal needs, please call 617-870-6728 or contact us online. Our office is in Winthrop.