New Jersey Medicaid Estate Recovery
After someone who received Medicaid long-term care dies, New Jersey can file a claim against their estate. This guide explains what is recovered, who is protected, and how to ask for relief.
Based on N.J.S.A. 30:4D-7.2 (lien against and recovery from the estate of a deceased recipient, with an expanded definition of estate reaching joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement); N.J.S.A. 30:4D-7.2a (no encumbrance or recovery while there is a surviving spouse or a surviving child who is under 21, blind, or permanently and totally disabled, plus long-term care partnership asset protection); N.J.A.C. 10:49-14.1 (Recovery of payments correctly made: age reach, three-year filing window, resident family member lien deferral, undue hardship waiver, and the excluded life estates and third-party trusts); federal baseline 42 U.S.C. 1396p(b).
What New Jersey recovers
New Jersey recovers every NJ FamilyCare (Medicaid) payment correctly made on a person's behalf for coverage on or after age 55, not only nursing home care.
Covered services and programsThe full list of care and waiver programs the claim can include
New Jersey recovers every NJ FamilyCare (Medicaid) payment correctly made on a person's behalf for coverage on or after age 55, not only nursing home care. Medicaid Communication 17-15 states that estate recovery in New Jersey includes payments for ALL services, not merely services for institutionalized beneficiaries, and that the claim reaches managed care capitation fees whether or not the person used the coverage in a given month. The current NJ FamilyCare Aged, Blind and Disabled application repeats the same rule: DMAHS may recover all payments made to pay for health care coverage on or after age 55, regardless of whether services were received. Estates of people enrolled in Title XIX waiver programs are also subject to recovery; the Home Care Expansion Program and Jersey Assistance for Community Caregiving are State funded and are the current exceptions. The home the person lived in is exempt for eligibility purposes while they are alive, but it counts as part of the estate after death and can be recovered against. Personal Needs Allowance balances belong to the estate and go to the personal representative. No lien is filed when someone applies for Medicaid; the claim and lien come after death, and only when there is no surviving spouse and no surviving child who is under 21, blind, or permanently and totally disabled. DMAHS must file its claim or lien within three years after it receives actual written notice of the death from the personal representative or another interested party (N.J.A.C. 10:49-14.1(d)). The claim ranks as a preferred claim in the probate estate, so it is paid after reasonable funeral expenses, the costs of administering the estate, and debts for services rendered by the Office of the Public Guardian for Elderly Adults, and ahead of general creditors. DMAHS may also decide, in its sole discretion, not to pursue a claim it judges would not be cost effective.
New Jersey uses an expanded estate definition and can reach certain assets that pass outside probate. Check the details and sources below, because the reach depends on the asset type.
Important: New Jersey is an expanded recovery state, so the estate DMAHS can reach is not limited to what passes through probate. N.J.S.A. 30:4D-7.2 a.(3) covers any property in which the person held legal title or an interest at death, to the extent of that interest, including property that went to a survivor, heir, or assignee through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement, and N.J.A.C. 10:49-14.1(l)2 adds any trust or annuity the person had an interest in at death. The DMAHS fact sheet spells out the practical result: a home or share of a home, bank accounts whether held alone or jointly, trusts, annuities, stocks and bonds all count, and the deceased's share stays part of the estate for recovery purposes even though it passes to a survivor. The reach has limits. A lien has to describe the share it encumbers, so property held as a tenancy in common is encumbered only to the deceased owner's share. Recovery is not pursued against a buyer who already paid fair market value. A life estate that expired at death and a qualifying discretionary trust funded by someone else stay outside the estate. Nothing at all can be collected while a surviving spouse, a child under 21, or a blind or permanently and totally disabled child is living. Ask a New Jersey elder law attorney about your own facts.
55 and older. New Jersey recovers Medicaid payments for coverage received on or after age 55 under N.J.S.A. 30:4D-7.2 a.(2), which applies to recipients who died on or after April 1, 1995 for whom a payment was made on or after October 1, 1993. The older provision at N.J.S.A. 30:4D-7.2 a.(1) reaches services received at 65 or older and still opens N.J.A.C. 10:49-14.1(a); subsection (c) of that regulation adds the ages 55 through 64 range, which is why the operating rule DMAHS states, and the rule printed on the NJ FamilyCare application, is age 55.
Who is protected from recovery
Surviving spouse: no encumbrance or recovery may be imposed while a surviving spouse is living (N.J.S.A. 30:4D-7.2a a.(2); N.J.A.C. 10:49-14.1(a)1 and (j)). The claim is postponed rather than cancelled, so DMAHS may recover from any remaining estate assets after the surviving spouse dies
Surviving child under 21: recovery is barred while the deceased is survived by a child under the age of 21, and is postponed until that child turns 21 (N.J.S.A. 30:4D-7.2a a.(2); N.J.A.C. 10:49-14.1(a)3)
Surviving blind or permanently and totally disabled child: recovery is barred while such a child is living, at any age, measured by the Social Security standards at 42 U.S.C. 1382c, and is postponed until that child dies or the disability ends (N.J.S.A. 30:4D-7.2a a.(2); N.J.A.C. 10:49-14.1(a)3)
Family member living in the home: if a family member lived continuously in the home the person owned at death, that home was the deceased's primary residence, and it was and remains the family member's primary residence, DMAHS may record a lien but will not enforce it until the property is voluntarily sold or the resident family member dies or moves out (N.J.A.C. 10:49-14.1(g))
Undue hardship: the estate representative may ask DMAHS to waive or compromise the claim when the estate subject to recovery is or would become the sole income-producing asset of the survivors and pursuing it would likely leave one of them eligible for public assistance or Medicaid. The written request is due within 20 days of receiving notice of the claim, and DMAHS answers in writing within 45 days (N.J.A.C. 10:49-14.1(h))
Buyer who already paid full price: recovery is not pursued against property held by a bona fide purchaser who paid fair market value for it, and is sought from the estate instead (N.J.A.C. 10:49-14.1(k))
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Property that may be exempt
- Long-term care insurance partnership protection: no encumbrance or recovery up to the amount of assets that were disregarded when eligibility was determined for a recipient given asset protection under a long-term care insurance partnership policy (N.J.S.A. 30:4D-7.2a a.(3), implementing the federal Deficit Reduction Act of 2005)
- Medicare cost sharing paid through the Medicare Savings Programs: Buy-in, Specified Low-Income Medicare Beneficiary (SLMB), and Qualified Individual (QI-1) benefits are not subject to estate recovery, effective January 1, 2010 (Medicaid Communication 17-15)
- Holocaust reparations: amounts received as reparations or restitution for loss of liberty or damage to health from National Socialist persecution, returns of seized or misappropriated property and any cash paid in its place, payments on insurance policies bought by victims, and interest accrued on those amounts are written out of the statutory definition of estate (N.J.S.A. 30:4D-7.2 a.(3))
- A life estate that ended at death: a life estate the person held during life but that expired on death is outside the recoverable estate (N.J.A.C. 10:49-14.1(n)1)
- Qualifying third-party trusts: an inter vivos or testamentary trust set up by someone else, including the beneficiary's spouse, is excluded when the trust is discretionary so the beneficiary could not compel distributions and the trust holds no assets the beneficiary had an interest in within five years before applying for Medicaid or within five years before death (N.J.A.C. 10:49-14.1(n)2 and (n)3)
- Community spouse resource allowance: assets of the community spouse that formed part of the community spouse resource allowance are not treated as the beneficiary's assets. Other assets of the community spouse are counted if they came from the beneficiary within five years before the Medicaid application or within five years before the death (N.J.A.C. 10:49-14.1(n)3)
- State-funded programs outside Title XIX: benefits paid through the Home Care Expansion Program (HCEP) and Jersey Assistance for Community Caregiving (JACC) are the current waiver-program exceptions to recovery (Medicaid Communication 17-15)
- Pharmaceutical Assistance to the Aged and Disabled (PAAD): benefits correctly paid under PAAD are not recoverable from the estate, apart from assistance incorrectly or illegally paid and third-party liability recovery (N.J.S.A. 30:4D-7.2a b.)
Undue-hardship waiver
New Jersey can waive recovery when it would cause an undue hardship for the heirs. Contact New Jersey Department of Human Services, Division of Medical Assistance and Health Services (DMAHS), Office of Legal and Regulatory Affairs (Estates) at 609-588-3016 to request the waiver and confirm deadlines.
Hardship waiver informationFrequently asked questions
Who is protected from Medicaid estate recovery in New Jersey?
What does New Jersey Medicaid recover after death?
Can I apply for an undue-hardship waiver in New Jersey?
Who handles Medicaid estate recovery in New Jersey?
Agency and statute sourcesOfficial references used for this page
- N.J.S.A. 30:4D-7.2, official New Jersey Legislature text of P.L.2015, c.124, s.2 (approved November 9, 2015), which sets out the current section. Read verbatim: a.(1) recovery for services received at 65 or older; a.(2) recovery for services received at 55 or older for recipients who died on or after April 1, 1995 with a payment made on or after October 1, 1993; a.(3) the expanded definition of estate covering joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement, and the Holocaust reparations exclusion; d.(2) preferred-claim priority.
- N.J.S.A. 30:4D-7.2a, official New Jersey Legislature text of P.L.2009, c.321, s.1 (approved January 18, 2010). Read verbatim: no encumbrance or recovery where there is a surviving spouse or a surviving child under 21, blind, or permanently and totally disabled; long-term care insurance partnership asset protection up to the amount disregarded at eligibility; the $500 and $3,000 minimums tied to the pre-1995 track; and the exclusion of correctly paid PAAD benefits.
- N.J.A.C. 10:49-14.1 (Recovery of payments correctly made), codified New Jersey Administrative Code via Cornell Legal Information Institute, used to confirm the current codified text and its amendment history (last amended R.2013 d.079, effective May 20, 2013, which substituted 'three years' for '90 days' in subsection (d)). Text read for: the (a) and (c) age tracks, the (b) limit on the dollar floors, the (g) resident family member lien deferral, the (h) undue hardship waiver with its 20-day and 45-day steps, the (i) cost-effectiveness discretion, the (k) bona fide purchaser rule, the (l) expanded estate definition, the (m) lien description rule, and the (n) exclusions.
- New Jersey Department of Human Services, Division of Medical Assistance and Health Services, Medicaid Communication No. 17-15 (October 17, 2017; updated October 25, 2017 and February 12, 2020), the official agency guidance. It states that payments for services received on or after age 55 are subject to recovery, that recovery covers ALL services and not merely institutional care including managed care capitation, that Medicare Savings Program cost sharing is excluded effective January 1, 2010, and that HCEP and JACC are the state-funded waiver exceptions. It attaches the full text of N.J.A.C. 10:49-14.1 and the public fact sheet 'The New Jersey Medicaid Program and Estate Recovery: What You Should Know.'
- NJ FamilyCare Application for Aged, Blind and Disabled Programs, form revision NJFC-ABD-APAUSP-0925 (September 2025), New Jersey Department of Human Services. The authorization page states that DMAHS may file a claim and lien against the estate to recover all NJ FamilyCare payments made on the beneficiary's behalf to pay for health care coverage on or after age 55, regardless of whether services were received, including monthly payments to a managed care entity.
- N.J.S. 3B:22-2, official New Jersey Legislature text of P.L.2005, c.304, s.47 (approved January 11, 2006), used to check the claim-priority cross-reference. Current order: a. funeral expenses; b. costs and expenses of administration; c. debts for services rendered by the Office of the Public Guardian for Elderly Adults; d. debts and taxes with preference under federal or State law; e. last-illness medical and hospital expenses; f. judgments; g. all other claims.
- New Jersey Division of Medical Assistance and Health Services contact page (live official page), which directs questions about a DMAHS recovery matter covering trusts, liens, estates, or medical records to 1-609-588-3016.
Information current as of July 29, 2026
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