will an inheritance affect my medicaid

When your mother receives her inheritance, you or whoever is representing her will have to inform the Medicaid agency for your state. Whether that is at the Medicaid rate or private pay rate depends on your specific situation, but make sure that bill is paid. If you have access to assets, Medicaid wants you to use it for your care before they spend a dime. Because the timing of when you are entitled to the inheritance will dictate how much pressure you will be under to remain in Medicaid compliance. After you inform Medicaid of the change in circumstances (i.e. the large inheritance), Medicaid benefits will cease and the former Medicaid recipient will private pay for their care. If you're a senior or disabled, you may qualify for Medicare. Remember, for eligibility purposes, Medicaid also has an asset limit. An inheritance may also affect your income, which in turn affects Medicaid eligibility. Copyright © 2020 All rights reserved. This site is for information purposes; it is not a substitute for professional legal advice. If the inheritance is rather large, and the Medicaid recipient will be comfortable without Medicaid assistance, then the process ends here. All information on this website is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. For most Medicaid programs, the asset limit is $2,000 for an individual and $3,000 for a couple. So, for example, if a Medicaid beneficiary inherits $5,000.00, think of how they may want to spend that money in the same calendar month in which it is received. The Medicaid recipient must still report the change in circumstances, but will simply explain how the money was spent to bring their total assets below $2,000.00. Otherwise,spending on other items and services, such as those described above, are certainly fine. But, essentially, you can transfer money to a caregiver after this services contract is properly signed. Use of this content by websites or commercial organizations without written permission is prohibited. For larger inheritances, spending all of it on “stuff” would likely be too wasteful. If the Medicaid beneficiary is receiving a small inheritance, then the beneficiary free to spend down his/her inheritance, in the same calendar month in which they inherit excess resources, and inform Medicaid how the money was spent. To see income limits by state and programs, click here). If, on the other hand, the Medicaid beneficiary is entitled to their inheritance on January 28th, now they only have a few days (January 28, 29, 30 and 31) to get back into compliance. This article will explain what happens when a Medicaid recipient receives an inheritance and what the person about to receive an inheritance can do to preserve their Medicaid benefits. MedicaidPlanningAssistance.org is a free service provided by the American Council on Aging, Inheritance Impact on Medicaid Eligibility, What is the Medicaid Estate Recovery Program, Medicaid Long Term Care | Questions and Answers. If over the age of 65, the Medicaid recipient will only have access to a pooled special needs trust (also referred to as a “d4C special needs trust”). They are very commonly used after a Medicaid beneficiary receives a sudden influx of money – such as from an inheritance. Inheritance does affect Medicaid eligibility and the results can be even more dramatic if she is covered by Medicare because of her disability. The Medicaid recipient must still report the change in circumstances, but will simply explain how the money was spent to bring their total assets below $2,000.00. There are also much more complicated planning techniques, such as the Modern Half a Loaf Strategy, which can protect some of the inheritance for other relatives. If you're on Medicaid because you've qualified for Supplemental Security Income, for example, your income must be less than $674 for an individual and $1,011 for a couple. The best advice is to talk with an accountant and get advice on how to best to accomplish this. (In most states, the income limit for an individual for long-term care Medicaid is $2,313 / month. For small inheritances, that might be easy to do. Not only must a Medicaid applicant meet this asset limit in order to qualify for benefits, he / she must maintain his / her assets at, or below, this level. Examples include using inherited money to: pay off credit card debt, pre-pay for funeral expenses, purchase a new big-screen television or laptop, fixing a car, buy new clothes, going out to a nice dinner, travel expenses, etc…    Â. Florida Medicaid ESS Manual Section: 1840.0109.04. Will you lose coverage? In this event, the inheritance can be used to pay for his / her care, and once the inheritance has been “spent down” to the asset limit, he / she can reapply for Medicaid. If the Medicaid beneficiary retains more than $2,000 in total assets as of February 1 (in this example), they risk losing Medicaid. Careful planning is necessary to make sure the inheritance doesn't have a negative impact. Medicaid coverage will then end until she has again spent down her money to the countable asset limit, $2,000 in many states. Inheriting a sum of money may affect your eligibility, depending on how much you inherited and what you do with the investment. If the inheritance is too large to “spend down” the same month it was received, the individual will lose his / her Medicaid coverage. At some point, buying more “stuff” wont make sense or will just be wasteful. Income limits vary by program and by state. In addition, there is likely an income-tax consequence to the caregiver (who, again, is receiving money for services to be rendered). However, it is possible to implement it if a Medicaid recipient still has enough funds to pay for care during the Medicaid ineligibility period. For example, if an inheritance of $100,000.00 is received on January 1st, the Medicaid recipient has the rest of January to either spend the money or engage an Elder law attorney to protect the inheritance and maintain Medicaid benefits. As explained above, a Medicaid recipient need only spend down their recent inheritance in order to re-qualify for Medicaid. If you have access to assets, Medicaid wants you to use it for your care before they spend a dime. Food Stamps During the month that you receive your inheritance, you will be ineligible for food stamps if the amount of the inheritance is greater than the income eligibility limits based on your family size and composition. Within 10 days of receiving an inheritance, each Medicaid recipient is obligated to report the change in circumstance to the Social Security Administration and Department of Children and Families along with an explanation of what happened to the inherited funds or assets. If you inherit money, you are legally obligated to report it to Medicaid. Its important to note that you cannot simply disclaim or refuse your inheritance. If you are a Medicaid recipient living at home or expecting to go home, it might be a good time to look into some home improvements or repairs that you have been putting off. Therefore, if at all possible, the inheritance should be “spent down” to the asset limit in the month in which it is received in order to avoid the possibility of being Medicaid ineligible the following month. The two most commonly used techniques used by elder law attorneys are: The personal services contract (also called a family caregiver agreement) is explained in more detail (click the link to read a more in-depth article explaining: what is a personal service contract?). Please note, even if the inheritance is spent in its entirety in the month in which it was received, Medicaid should still be notified of the inheritance and how it was spent. Your elder law attorney will have other creative ways of taking an inheritance and maintaining Medicaid eligibility, but this provides some basic information of what you should be thinking about to preserve Medicaid benefits after an inheritance. If their assets ever exceed $2,000 at the end of any calendar month, they will no longer be Medicaid-eligible. Medicaid recipients must constantly maintain assets below $2,000.00. You would avoid this by reporting the influx of assets in Medicaid and that you no longer wish to receive Medicaid benefits in the same month in which the new assets were received. If you are inheriting a significant sum of money, property or a business, you should consider consulting an attorney for help navigating your state's specific Medicaid guidelines. © ELDER NEEDS LAW 2020. Essentially, the government allows the use of special needs trusts to preserve Medicaid benefits.

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