How to Apply for a Kentucky Medicaid Hardship Waiver to Protect Inherited Property from Estate Recovery Claims

Disclaimer: This article is for educational purposes and is not legal advice. Always consult an attorney for guidance.

Detailed Answer

Under Kentucky law, the Cabinet for Health and Family Services may recover Medicaid benefits from a recipient’s estate after death (KRS 205.563). This includes real property inherited by heirs. However, heirs can request a hardship waiver to protect inherited property if recovery would cause undue hardship.

1. Understand Medicaid Estate Recovery in Kentucky

• Medicaid estate recovery seeks reimbursement for benefits paid on behalf of a deceased individual.
• Recoverable assets include the decedent’s real property interest at death.
• Heirs receive notice of recovery rights and deadlines.

2. Identify Hardship Waiver Eligibility

A hardship waiver may apply when estate recovery would impose undue financial burden on heirs. Common scenarios:

• Primary residence passed to a low-income heir who cannot afford to pay the claim.
• Sale proceeds would not cover the Medicaid claim without leaving heirs impoverished.

3. Prepare the Hardship Waiver Request

To apply:

1. Download the hardship waiver form from the Kentucky Cabinet’s website or request it from the Estate Recovery unit.
2. Gather documentation:
   • Death certificate and probate documents showing the heir’s interest.
   • Proof of heir’s income, assets, monthly expenses, and residency status.
   • Appraisal or estimated value of the inherited property.
3. Explain the hardship: Describe why enforcing recovery would cause undue hardship to the heir.
4. Complete and sign the waiver form and attach all supporting documents.

4. Submit and Track Your Application

Mail or deliver the completed waiver packet to:

Estate Recovery Unit
Kentucky Cabinet for Health and Family Services
275 E. Main Street, 6W-A
Frankfort, KY 40621

Alternatively, submit electronically if permitted. Keep copies of all materials and obtain proof of delivery. The Cabinet must respond within 90 days.

5. Review and Appeal Process

If the Cabinet grants the waiver, it will issue a notice confirming no recovery against the property. If the waiver is denied in whole or in part, you can request an administrative hearing under Kentucky’s contested case procedures (KRS 13B.030). File your appeal within 30 days of the denial notice.

During the hearing, the Cabinet must prove that recovery will not cause undue hardship. Present evidence of financial status, property use, and family circumstances.

Helpful Hints

• Apply early: Submit the waiver request as soon as you inherit the property.
• Keep detailed records: Document all communications with the Cabinet.
• Consult probate counsel: An attorney can help gather evidence and prepare the waiver.
• File appeals timely: Missing appeal deadlines waives your right to a hearing.
• Monitor statute updates: Medicaid recovery rules may change at the federal or state level.