According to both federal and state law, the State of New Jersey is required to impose a lien against a person’s estate for the purpose of recovering Medicaid benefits. If a person is at least 55 years of age and has received Medicaid assistance, then New Jersey has an obligation to impose a lien against that individual’s estate. The amount of the lien is based upon the Medicaid benefits that the person received beginning with that person’s 55th birthday.
Many individuals transfer their property subject to a life estate interest. The life estate guarantees that individual’s right to possession, use and enjoyment of the property during his or her lifetime. The New Jersey Medicaid statutes allow for the imposition of a lien against a life estate. Fortunately our regulations exempt the life estate from that lien.
According to N.J.A.C. 10:49-14.1 (n) (1), the State of New Jersey is not allowed to impose a Medicaid lien against a life estate. The New Jersey Medicaid regulations state that the term “estate” does not include a life estate in which the individual held an interest during his or her lifetime but which expired upon death.