Will Medicaid Take the House? Estate Recovery and Medical Liens in Washington State
One of the most common questions families ask after a loved one passes is also one of the most frightening: “Will Medicaid take the house?”
Here’s the Short Version of the Answer
Medicaid is best thought of as a potential creditor with powerful collection rights, not an automatic house-taker: in Washington it may assert an estate recovery claim against probate and certain non-probate assets, but only up to what was actually paid for covered services and subject to specific exemptions and hardship rules.
So if the decedent received Apple Health/Medicaid benefits, mentally park Medicaid right alongside other lienholders and creditors—something that must be identified, quantified, and resolved in the right order before you assume what equity, if any, truly belongs to the heirs.
Now, I’ll Explain it in More Detail
The topic of Medicaid repayment (aka “estate recovery”) often comes up late in the process, sometimes after probate has already started or a home is under contract. When it does, it can feel like the rug has been pulled out from under everyone involved.
Understanding how Washington’s estate recovery rules actually work can replace that fear with clarity and help families make informed decisions before money is distributed or property is sold.
In Washington State, certain medical benefits paid during a person’s lifetime can become claims against their estate after death. These claims can affect how much heirs ultimately receive and, in some cases, how a property sale proceeds.
This article explains what estate recovery is, when it applies, how it shows up during probate, and what PR’s (Executors and Administrators) and heirs should understand before distributing assets or selling real estate.
What Is Estate Recovery in Washington State?
Estate recovery is a legal process that allows the State of Washington (the Government) to seek repayment for certain medical benefits paid on behalf of a deceased person.
In Washington, this most commonly involves Apple Health, also known as Medicaid, and typically relates to payments for nursing home care, in-home long-term care, and some related medical services received after age 55.
Estate recovery is required under federal law and implemented through Washington statutes. It does not mean heirs did anything wrong. It is part of how these benefit programs are structured.
Estate recovery is separate from ordinary medical bills. Hospitals, doctors, and other providers may also file creditor claims independently during probate.
When Does Estate Recovery Apply?
Estate recovery generally applies when:
• The deceased received Apple Health funded long-term care or related services
• Those services were received at age 55 or older
• The deceased owned assets that are subject to recovery under Washington law
Recovery is generally limited to the value of the deceased person’s estate plus certain nonprobate assets defined by statute. (I’ll explain these two types of assets below.) It does not exceed what the state actually paid for services that are subject to recovery.
Not every Medicaid recipient is subject to estate recovery, and not every medical service triggers a claim.
Which Assets Can Be Subject to Recovery
This is an important area where Washington law is more nuanced than many people expect.
Washington law allows recovery from:
• The probate estate
• Certain non-probate assets, as defined by statute
In practice, commonly affected assets include:
• Real estate or other property owned in the deceased person’s name at death
• Bank accounts or investments without named beneficiaries
• Other probate personal property
Assets that are less likely to be subject to recovery include:
• Property held in a properly drafted and funded trust
• Some jointly owned property with right of survivorship
• Life insurance and retirement accounts with individual beneficiaries
• Property transferred by a properly recorded Transfer on Death Deed
Whether a specific asset is exposed depends on how it is titled and how it fits within Washington’s definitions of estate and nonprobate assets. Beneficiary designations and trusts often reduce exposure, but they do not automatically eliminate it in every situation.
How Estate Recovery Claims Appear During Probate
If probate is opened, creditors are given a defined period of time to submit claims against the estate.
State agencies, typically through the Washington Health Care Authority or Department of Social and Health Services, may file a formal creditor claim during this period. These claims usually identify the services provided and the dates involved.
The personal representative is responsible for reviewing claims, determining whether they are valid, and addressing them according to Washington probate rules.
Valid claims must be handled properly. Ignoring or mishandling a claim can delay closing the estate or create personal liability for the executor.
How Estate Recovery Can Affect Selling a Home
When real estate is part of the estate, estate recovery can directly affect the sale.
Common impacts include:
• A claim or lien that must be paid from sale proceeds
• Delays in closing while claims are reviewed or resolved
• Reduced net proceeds available to heirs
In many cases, the home can still be sold, but recovery claims must be addressed before final distribution of funds. This is why it is risky to assume net proceeds or distribute money before creditor issues are resolved.
Hardship Waivers and Deferrals
Washington law provides hardship protections in certain situations.
These may include:
• A surviving spouse
• A dependent or disabled child
• Situations where recovery would cause documented undue hardship
In some cases, recovery may be deferred rather than permanently waived. These determinations are fact-specific, must be requested within required timeframes, and require supporting documentation.
Hardship protections are not automatic and should be raised early when applicable.
Common Mistakes Families Make
Some of the most common issues I see include:
• Being surprised by a claim late in probate
• Distributing assets before creditor periods close
• Assuming Medicaid automatically takes the house
• Selling property without accounting for recovery claims
• Waiting too long to ask questions
Estate recovery does not apply in every case, but when it does, timing and order of operations matter.
When It Makes Sense to Get Help
If an estate involves real estate, Medicaid benefits, or uncertainty about potential claims, getting guidance early can prevent delays and unnecessary stress.
This does not always mean a complicated process. Often it simply means understanding what applies so decisions are made in the correct sequence.
A short conversation early on can save months later.
Helpful Washington State Resources
RCW 43.20B.080 Estate Recovery Statute
https://app.leg.wa.gov/rcw/default.aspx?cite=43.20B.080
Washington Health Care Authority Estate Recovery Overview
Washington Law Help Estate Recovery Explanation
https://www.washingtonlawhelp.org/en/estate-recovery-long-term-care-services-paid-state
Washington Probate Overview
https://www.nolo.com/legal-encyclopedia/washington-probate-an-overview.html
Final Thoughts
Estate recovery is not something most families think about until they are already deep into probate. When it appears unexpectedly, it can feel overwhelming.
Understanding how medical benefits, estate recovery rules, probate assets, and real estate intersect makes the process far more manageable.
This article is general information about Washington law and is not legal advice. For advice about a specific situation, consult a Washington attorney or other qualified professional.
If you are handling a property in Whatcom County and want clarity on how estate recovery or medical claims may affect a sale, understanding the landscape early can make everything that follows smoother.
Connect with me to start the process of understanding how the real estate and its potential sale ultimately ties into your situation.
