What Is the Statute of Limitations to Pay Medicaid from a Special Needs Trust?

July 30, 2019
Medicaid Reimbursement

There is no statute of limitations on recovering Medicaid funds owed from a special needs trust when the beneficiary passes away. However, you first need to determine whether the special needs trust in question does in fact owe a Medicaid reimbursement in the first place.

There are two different types of special needs trusts and the difference is primarily where the assets originated. If the trust holds assets that belonged to the disabled individual then the trust must reimburse the State for its Medicaid costs when the disabled individual dies. A provision to that effect should be included in the trust language.

If the assets originated from someone other than the disabled individual, such as parents or grandparents, then the trust does not need to make Medicaid reimbursements from that type of special needs trust.

Keep in mind that when the disabled individual passes away and if the trust is the type subject to Medicaid reimbursement that the trustee has an affirmative obligation to make that reimbursement. It is not dependent upon the state initiating a claim. The trustee should not make any other disbursements until the Medicaid claims are settled.

For more information on special needs trusts in the Baltimore area, please contact Stouffer Legal at 443-470-3599.

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