I live in GA and need to know if assets that pass on to my heirs outside of probate are subject to estate recovery.
Georgia Medicaid recovery is very broad. A revocable trust is subject to it. So are assets which pass under a right of survivorship. If Medicaid is a potential need for you, consult an experienced elder law attorney for advice on your options.
This answer is not intended to provide you with specific legal advice regarding your situation, or to create any attorney-client relationship. The intent is only to provide general information. You should be aware that you cannot rely on this answer to provide you with any protection against tax penalties. You should always consult your own attorney in order to obtain legal advice.
You need a consult with an elder law attorney who can advise you on the best approach--a revocable trust is not among the choices that will do what you want.
Under federal law a revocable trust is treated as an available asset so it won't protect the house. Certain irrevocable trusts, however can do the job, but you have to give up ma lot and then wait 5 years before making application for Medicaid. There are other ways of accomplishing what you want, depending upon state law, but the cost of doing it wrong would be great. Your best course of action would be to consult with an elder law attorney experienced in Medicaid planning in your state. Use the AVVO Find a Lawyer search tool to locate one or go to the website of the National Academy of Elder Law Attorneys at www.naela.org.
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I want to add to the excellent advice you have already received. Assets that pass outside your estate generally are not subject to estate recovery UNLESS the asset involves real estate. For example, a house owned by a married couple as joint tenancy with right of survivorship passes outside of probate to the surviving spouse. However, Medicaid will put a lien on that property at the death of the second spouse. The laws and regulations surrounding Medicaid are complex, and you do need to seek the advice of an experienced Elder Law attorney. You can find one in your area through the National Academy of Elder Law Attorneys, www.NAELA.org.
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