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When you receive an inheritance and have previously qualified for Medicaid in Minnesota, the state may seek to recover costs from your estate after your death. This process is called Medicaid Estate Recovery. Under federal law (42 C.F.R. §433.36), states must attempt recovery but may waive it if it creates an undue hardship. Minnesota implements this through its Department of Human Services (DHS) policy and relevant Minnesota statutes.

1. Understanding Minnesota Medicaid Estate Recovery

Minnesota DHS places a claim against the estate of a deceased Medicaid recipient for costs paid by Medicaid. This applies only if the recipient was age 55 or older when benefits were received or lived in a nursing facility. The claim may attach to real property, including your inherited home.

Key statute: Minn. Stat. §256B.15, subd. 1u (“Liens and recovery”).

2. What Is a Hardship Waiver?

A hardship waiver asks DHS to release its claim when recovery would cause significant financial or personal hardship to heirs or blameless third parties. Common examples include:

• A surviving spouse unable to afford housing costs without the property.
• A minor, disabled, or blind child who lives in the home.
• Other relatives who have lived in the home for at least two years and cannot easily relocate.

Federal guidance: 42 C.F.R. §433.36(c).

3. How to Apply for a Hardship Waiver

1. Contact Your County Human Services Office
   Reach out to the county office that handled the decedent’s Medicaid benefits. Ask specifically for the “Estate Recovery Hardship Waiver” application.
2. Gather Required Documents
   • Copy of the decedent’s death certificate.
   • Proof of your relationship (e.g., will, trust documents, probate filings).
   • Current property appraisal or market analysis.
   • Detailed household budget showing income and expenses.
   • Documentation showing why selling or mortgaging the property creates undue hardship (medical needs, long-term care, minor/disabled dependents).
3. Complete and Submit the Application
   Fill out all sections of the waiver request. Attach your supporting documents. Submit it to the county DHS office by certified mail or in person. Keep copies and proof of delivery.
4. Follow Up Within 30–45 Days
   DHS typically reviews hardship requests within 60 days. Call the county office if you haven’t received a decision in 45 days.
5. Appeal if Denied
   If DHS denies your waiver, you have 30 days to file an appeal under Minnesota administrative rules (Minn. R. 9545). Ask the county office for an appeal packet or visit DHS Appeals.

4. Timeline and Decision Factors

DHS will evaluate:

• Whether the home is the heir’s primary residence.
• Financial status of the heir and any dependents.
• Availability of other assets to pay the claim.

Expect a written decision outlining approval, denial, or conditions (e.g., partial recovery). If approved, DHS may remove the lien or agree to a reduced claim.

Helpful Hints

• Start early. Gathering appraisals and financial records can take weeks.
• Be thorough. Incomplete applications delay review or lead to denial.
• Document medical or special needs if apply on behalf of a minor or disabled heir.
• Consider consulting an elder law attorney to review your waiver request (this is not legal advice).
• Keep all correspondence in writing. Phone notes help if you later appeal.

Disclaimer: This article is for educational purposes only and does not constitute legal advice. For advice specific to your situation, consult a qualified attorney.