I applied for Medicaid in April for my mother, but the application was not approved until August. The nursing home claimed th...Read more
Receiving an Inheritance While on Medicaid
- October 11th, 2023
For most people, receiving an inheritance is something good, but for a nursing home resident on Medicaid, an inheritance may not be such welcome news. Medicaid has strict income and resource limits, so an inheritance can make a Medicaid recipient ineligible for benefits that pay for their care. Careful planning is necessary to make sure the inheritance doesn't have a negative impact.
Reporting Inheritance Money as Income
An inheritance will be counted as income in the month it is received. You or whoever is representing you will have to inform the state Medicaid agency, and coverage will end until you have spent down assets to the countable limit again, which is $2,000 in most states. If you receive an inheritance and the amount puts you over the income limits for your state, you will not be eligible for Medicaid for that month. If you can properly spend down the money in the same month it is received, you will be eligible for Medicaid again the following month. The first thing to do is pay the nursing home for the current month (at the Medicaid rate).
Minimizing the Amount of Your Inheritance
If you have money left after paying the nursing home, your elder law attorney can advise you on the proper way to spend down the money. You may be able to give it to a spouse, a child with special needs, or the child's special needs trust. You may also pre-pay an irrevocable funeral contract or buy burial items for a close relative. It could also be spent on travel, dining out, clothes, television, DVD player, and paying off any debts you may have. In most cases, you can't make gifts with the money, but there are some exceptions to this rule, and in some states, good planning techniques may permit some gifting. To be sure, you will need to consult with your elder law attorney.
If the inheritance is too large to spend in one month, your attorney may be able to use other Medicaid planning techniques to protect a portion of it.
Find a qualified elder law attorney near you for guidance on Medicaid.
Created date: 05/15/2007