John C. Holden Law Blog

Keeping You Informed


On September 1st, 2016, the Oklahoma Health Care Authority changed the Medicaid rules relating to whether an individual’s home which is titled in the name of their trust is considered exempt or countable.  

    Prior to September 1st, 2016, OAC 317:35-41.1 provided that a residence held in a revocable trust would retain its exempt character and would therefore not be counted against an individual who applied for Medicaid Benefits.  This applied to an unmarried individual as well as a married individual.

    Effective September 1st, 2016, the Oklahoma Health Care Authority has revised OAC 317:35-41.1 to provide that a residence held in a revocable trust is now considered as an available or “countable” resource.  The basis for this change by the OHCA is that it brings Oklahoma into compliance with the existing federal law, Title 42 U.S.C. § 1396p(3)(A)(i) which states in relevant part that the corpus of a revocable trust shall be considered resources available to an individual.

    At this point, the Oklahoma Department of Human Services has instructed all of its Medicaid case workers to inform an applicant or their representative that the home property exemption will not apply unless the residence is removed from the applicant’s revocable trust.  An applicant or their representative will be provided with a Client Contact and Information Request that gives the applicant or their representative ten (10) calendar days within which to submit proof that the residence has been removed from their revocable trust.  If written proof is not submitted within ten (10) days of the receipt of the DHS Client Contact form the individual’s application will be denied and their application for Medicaid Benefits closed.

    Please note that the application of this revised regulation also applies to an individual who has already been approved for Medicaid Benefits and is receiving benefits either in their home or is in a nursing facility and who still has a home in a revocable trust.  The commentary accompanying this Notice of change provides that DHS case workers are to provide to each individual receiving Medicaid Benefits, at the time of the individual’s annual review, with a ten (10) day notice that the individual or their representative must remove their home from their revocable trust.  If the individual does not present proof within the ten (10) calendar days of the removal of the home from their revocable trust, then the individual’s Medicaid Benefits will be terminated.  Alternatively, if an individual or their representative complies with the DHS case worker’s requirement and removes the individual’s home from their revocable trust they will in all likelihood be provided with some “time” before the home would become a “countable” asset.  OAC 317:35-5-41.8(3)(D) provides “At the end of the 12 month period the home property becomes a countable resource unless medical evidence is provided to support the feasibility of the member to return to the home within a reasonable period of time (90 days).”  Ordinarily, the imposition of this time line is subject to the case worker’s discretion as to whether the individual or their representative are taking all steps necessary to convert the resource for use to meet the individual’s current needs.

    Bottom line, an applicant or the recipient of Medicaid Benefits will need to plan for removal of their home from their revocable trust.  Although this presents a significant planning challenge to any individual who is either receiving Medicaid Benefits or applying for Medicaid Benefits; there are planning options available for individuals and families who desire to preserve some of the value of home while still enabling the individual to receive necessary Medicaid Benefits.

    If you or a family member requires additional information, please feel free to contact me via my office phone number or via email.  Better yet, click on the link at the bottom of my Medicaid Planning and VA Benefit Planning Pages to download a copy of a one (1) page Risk Assessment Tool.  If you will fill this form out, I will provide you within two days with a detailed risk analysis letter that will provide you with planning options that you can implement.

John Holden