Medicaid and property in rights of survivorship?
Executive summary
Rights of survivorship—most commonly joint tenancy with right of survivorship (JTWROS) or tenancy by the entirety—can keep assets out of probate and therefore out of traditional Medicaid estate recovery in many states, but federal law allows states to adopt an “expanded” definition of estate that reaches nonprobate interests and states vary widely in whether and how they exercise that power [1] [2]. The practical effect: joint titling can protect property in some states and circumstances, but it is not a universal shield—state statutes, liens placed during life, percentage interests, and recent policy changes (for example, New York’s repeal of expanded recovery) materially change the outcome [3] [4] [5].
1. How rights of survivorship normally interact with Medicaid estate recovery
Under the baseline framework, assets that pass outside probate—bank accounts with POD/TOD designations, life insurance with beneficiaries, and real estate titled as JTWROS—typically do not form part of the deceased’s probate estate and therefore are not recoverable by Medicaid programs that confine recovery to probate estates [1] [2]. Multiple practitioner-oriented guides and state-focused summaries explain this “probate-only” protection, noting that survivorship titling causes property to transfer automatically to the co-owner on death, bypassing probate and often MERP claims in probate-only states [6] [7].
2. The federal permission that creates the trap: “expanded” estate recovery
Federal Medicaid rules permit, but do not require, states to define “estate” broadly and pursue recovery against assets that bypass probate, including jointly held property, life estates, living trusts, and other nonprobate interests—so-called expanded estate recovery [1] [2]. Where states adopt expanded recovery, the usual probate-avoidance strategies can fail because the state asserts a claim against the deceased recipient’s legal interest even though title passed outside probate [1] [3].
3. State variation matters—New York as a counterexample
States differ sharply: some pursue expanded recovery while others limit recovery to probate estates; New York is an often-cited example that repealed expanded recovery and thus generally does not allow recovery against assets the recipient held jointly with rights of survivorship or assets in a living trust or life estate [3] [6]. This divergence means the same titling plan can be protective in one jurisdiction and vulnerable in another, and public guidance and enforcement resources vary by state, which creates inconsistent outcomes for families [1].
4. Interplay with eligibility rules and lifetime liens
Titling affects not only postmortem recovery but also Medicaid eligibility and liens while a recipient is alive: joint ownership percentages can be counted for eligibility purposes (Medicaid may assess the applicant’s interest), and states can place liens on a recipient’s home under certain conditions (for example, when a person is “permanently absent” in a nursing facility) that complicate sale or transfer even before death [8] [3] [9]. Legal counsel and elder-law sites caution that a small nominal joint interest (e.g., 1%) can trigger transfer-penalty rules or be treated as an available resource in some eligibility calculations [10].
5. Practical trade-offs and hidden incentives in the reporting and advice ecosystem
Consumer-facing law firms and elder-planning sources often emphasize titling and trusts as protective tools, which is accurate in many states, but these advisers may also have an agenda to sell planning services; independent analyses warn that titling gives co-owners immediate rights (and risks) and that intentions must be clearly documented to withstand scrutiny [11] [4]. Public agencies vary in outreach, so individuals may rely on fee-based advisors whose priorities include promoting strategies that are state-specific and fact-specific [1] [3].
6. Bottom line for families navigating rights of survivorship and Medicaid
Rights of survivorship can be an effective tool to avoid probate-based Medicaid recovery in many states, but because federal law allows expanded recovery and states exercise disparate rules—plus the potential for liens, eligibility counting of joint interests, and drafting pitfalls—titling should be evaluated against the specific state’s statutes and the individual’s full financial and caregiving picture before assuming immunity from Medicaid claims [1] [3] [2]. Where reporting cites blanket protections, the evidence shows an important caveat: outcome depends on state law, timing, percentage interests, and whether the state has adopted expanded recovery [7] [4].