§ 258.3. Property liable to repay the Department.
(a) All estate property is subject to the Department’s claim. Estate property includes all real and personal property of a decedent which is subject to administration by a decedent’s personal representative, whether actually administered or not administered.
(b) Property held by a decedent and another at the time of death as joint tenants with rights of survivorship, or as tenants by the entireties, is not subject to the Department’s claim.
(c) Life insurance which is payable to the decedent’s estate is subject to the Department’s claim, even if the life insurance policy contains a facility of payment clause. A facility of payment clause is a provision which authorizes direct payment to a person. The proceeds of life insurance on the decedent which is directly payable to a beneficiary is not subject to the Department’s claim.
(d) Assets placed in trust prior to the death of the decedent, including irrevocable burial reserves, are not subject to the Department’s claim if the assets are not payable to the decedent’s estate. Trust assets and burial reserve proceeds which are or become payable to the decedent’s estate are subject to the Department’s claim. Assets designated for a testamentary trust are subject to the Department’s claim. A testamentary trust is a trust created by the will of the decedent.
(e) A trust which meets the requirements of § 178.7(f) (relating to treatment of trust amounts for all categories of MA for trusts established on or after July 30, 1994) is not subject to the Department’s claim.
(f) Property within the scope of 20 Pa.C.S. § 3101 (relating to payments to family and funeral directors), is subject to the Department’s claim.
(g) The following special populations are exempt from estate recovery:
(1) Certain income, resources and property of Native American Indians and Alaska Natives. Exempt items include:
(i) Interests in and income derived from Tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the United States Claims Court.
(ii) Ownership interest in trust or nontrust property, including real property and improvements including the following:
(A) Property located on any Federally recognized Native American Indian Tribe’s reservation, Pueblo or Colony, including former reservations in Oklahoma, Alaska Native regions established by Alaska Native Claims Settlement Act and Indian allotments or near a reservation as designated and approved by the Bureau of Indian Affairs of the United States Department of the Interior.
(B) For any Federally-recognized Tribe not described in clause (A), property located within the most recent boundaries of a prior Federal reservation.
(C) Protection of nontrust property described in clauses (A) and (B) is limited to circumstances when it passes from an Native American Indian as defined in section 4 of the Indian Health Care Improvement Act (25 U.S.C.A. § 1603) to one or more relatives by blood, adoption or marriage, including Native American Indians not enrolled as member of a Tribe and non-Indians, such as spouses and stepchildren that their culture would nevertheless protect as family members; to a Tribe or Tribal organization; or to one or more Native American Indians.
(iii) Income left as a remainder in an estate derived from property protected in subparagraph (ii) that was either collected by a Native American Indian, or by a Tribe or Tribal organization and distributed to Native American Indians, as long as the individual can clearly trace it as coming from the protected property.
(iv) Ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish and shellfish resulting from the exercise of Federally-protected rights, and income either collected by a Native American Indian, or by a Tribe or Tribal organization and distributed to Native American Indians derived from these sources as long as the individual can clearly trace it as coming from protected sources.
(v) Ownership interests in or usage rights to items not covered by subparagraphs (i)—(iv) that have unique religious, spiritual, traditional or cultural significance or rights that support subsistence or a traditional life style according to applicable Tribal law or custom.
(2) Government reparation payments to special populations.
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