Can Medicaid take money from a death settlement?


Q. Can Medicaid take a settlement from family members of a deceased 28-year-old in New Jersey who was quadriplegic and in a nursing home for a portion of his disabled years? There is no lawsuit settlement yet, but may be in the next few years.
— Hopeful

A. It depends.

There are two types of claims for death caused by a third party due to negligence or other wrongful conduct.

One is a survival action that is brought to recover damages to the deceased person, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

The other is a wrongful death action that is brought to recover damages for the survivors of the deceased person, she said.

“Wrongful death settlements are not subject to a Medicaid lien because the injured parties are the survivors,” she said. “However, settlements of survival actions are subject to Medicaid liens because the injured party is the deceased person.”

She recommends you speak to a personal injury attorney who can address the issue based on the specific facts of your case.

As a side note, New Jersey’s statute of limitations require wrongful death claims to be filed within two years of the date of death, Whitenack said.

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This story was originally published on April 23, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.