Appellate Division Allows Filing of Medicaid Lien Against Property Held by Spouses as Tenants-By-The-Entireties
Mary D. Forest v. Division of Medical Assistance and Health Services, Docket No. A-1344-2, 2026 WL 772366(N.J. Super. App. Div. March 19, 2026)
The plaintiffs were the beneficiaries under the will of Clerveaux Benoit (“Decedent”). They sought to invalidate a lien by Division of Medical Assistance and Health Services (“DMAHS”). The lien had been placed on property owned by the Decedent and his wife (“Wife”). The Decedent and his Wife had acquired the property in 1986 and held it as tenants by the entirety.
The Wife had been a Medicaid beneficiary from 2003 until her death in 2012. She died before the Decedent.
DMAHS expended approximately $415,500 for medical care and services provided to the Wife.
In April 2019, the executor of the Wife’s estate sent a letter to DMAHS, although it appeared that prior communications among the parties had occurred too. In response to that letter, DMAHS advised that it was asserting a claim against the Wife’s estate for the amount paid out. DMAHS also filed and served a lien claim.
On August 1, 2024, the plaintiffs filed a complaint against DMAHS, to declare the lien ineffective against the Decedent’s estate, the property, or the proceeds from the sale of the residence. The plaintiffs acknowledged that the Wife had received benefits from DMAHS but asserted that the lien was not effective against the property because the Decedent had become the sole owner of the property when his Wife died, since they had owned it as tenants by the entirety – i.e., when the Wife passed away, the Decedent became the sole owner.
The trial court denied the plaintiffs’ application. The plaintiffs appealed.
The Appellate Division affirmed, on four basic grounds: (1) tenancy by the entirety property falls within the expansive statutory and regulatory definition of “estate” subject to Medicaid recovery; (2) the existence of a surviving spouse affects only the timing of enforcement, not the validity or authority to place a lien; (3) the lien was timely because New Jersey law imposes no time limit on the filing of such a lien; and (4) the lien did not constitute an unconstitutional taking.