Readers of this blog are well aware that the Medicaid programs have strict income and resource limits. Maintaining eligibility is often vital to the well-being of the individual. This is especially true if the person is in a nursing home facility, because there’s usually no other insurance available to pay for that expensive care. What happens when the Medicaid recipient learns that they are about to receive an inheritance?
A Medicaid recipient may inherit from someone’s estate based on the Will or just based on state law requirements if there is no Will. The recipient might be named as Beneficiary under someone else’s life insurance, annuity, or other asset. No matter what, the situation creates legal issues that should be promptly tackled in order to protect the benefits and preserve the inheritance if at all possible.
Each case is unique and calls for individual legal strategies. There are certain rules of the Medicaid program, though, that people have to be aware of. Here are some of the issues, and questions to ask.
— A Medicaid recipient has a duty to access assets that they are entitled to receive. Is the recipient able to act for himself? if not, is there a Guardian or a designated agent under Power of Attorney who can do so?
— If assets are received and then the recipient’s available resources exceed the $2,000 limit on the first day of the next month, they are likely to lose their benefits, which can jeopardize their ability to stay in the facility. What options might be available for this person?
— Is the person under 65? They may want to investigate the idea of stashing the funds in a Special Needs Trust, a Pooled Trust or an ABLE account, depending on their circumstances. Sometimes a Court order is required.
— Is the person over 65? There may be other options, which an elder law attorney is familiar with.
— If the individual continues to receive Medicaid benefits despite having excess resources, s/he will accumulate an overpayment and a debt to the State.
— What happens if the individual disclaims his inheritance or gives it away? Both of these steps can have risky results for the person who needs the Medicaid benefits, but they might be part of a carefully-planned legal strategy which still protects the individual.
Careful planning can prevent a crisis for a disabled person who depends on Medicaid benefits, but legal advice can create opportunities to preserve the inheritance and preserve benefits as well. Whether you are an executor, administrator, or any one else who’s assisting an individual on Medicaid, call for an appointment to discuss your specific situation ……….. 732-382-6070