In this Elder Law Minute, Wes Coulson, Illinois and Missouri Elder Law attorney, discusses what happens to the Medicaid eligibility of a person who is in a nursing home if they receive an inheritance and offers the best planning opportunities for that situation.
Does Receiving an Inheritance Mess Up Medicaid Eligibility?
Transcript:
Hi, I’m Wes Coulson from Dent-Coulson Elder Law in O’Fallon, Illinois and St. Louis, Missouri and this is your Elder Law Minute.
Question: If a person who is in a nursing home on Medicaid received an inheritance from somebody else who dies is that going to affect their eligibility?
Quick answer: Depends on how they receive it.
The wrong way is the most common way and that is if they are provided for outright in the will or the living trust of the person who has died. In that case, if they receive the inheritance then they’re going to be over the Medicaid asset limit and they’re going to go off of Medicaid until they have spent down that money paying for their nursing home care. But, if it’s done correctly through something called a Special Needs Trust, or Supplemental Needs Trust, then money can be set aside for the benefit of that person who is in the nursing home to pay for things that Medicaid doesn’t pay for. And when that person in the nursing home dies, that money is still going to stay in the family.
So, big lesson there for people who are planning their estates. The biggest example of that is a married couple because if the spouse who is not in the nursing home dies first, that can be a big problem. One advantage on that is if the planning has been done through a living trust rather than a will. In that situation, even if the person hasn’t been provided for through a special needs trust, if we have a living trust there are legally available procedures where we can convert the provision for that person in the nursing home in the living trust into a special needs trust.
So, lesson here, if you have a family member who is older and either is in a nursing home or that might be the case before you die, see a lawyer because the way in which that planning is done is going to make a huge difference. Thanks.
For more information about Medicaid and Asset Preservation, visit these articles:
- Do Living Trusts Protect Assets From Medicaid or VA Spend Down?
- How an Asset Preservation Trust Protects Your Life Savings From Long-Term Care Costs
- Why Do I Need an Asset Preservation Plan?
“Your Trusted Advisor on the Elder Care Journey”
Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 or (314) 567-9292, or Contact Us and we will get in touch as soon as possible.
