When a beneficiary is on Medicaid and she’s set to get a bequest of the grantor’s home in her last will, the question may arise about the impact on her Medicaid benefits. Can a Medicaid recipient inherit my home? The answer will depend on the Medicaid program and what your beneficiary decides to do with the house, according to the law firm, Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, LLC.
We cite information from a nj.com’s recent article entitled “What happens to my daughter’s Medicaid if I leave her my home?”
As you likely know, Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities.
In some states the program covers all low-income adults below a certain income level.
Medicaid programs are required to follow federal guidelines, but coverage and costs may be different from state to state. States can be more generous with who they include in the Medicaid program and what benefits are offered.
So let’s take a look at this article in order to answer the question, can a Medicaid recipient inherit my home? In this particular article, if the daughter receives Medicaid because she also receives SSI or has ABD Medicaid, the house will not be counted as a disqualifying asset if the house is the daughter’s principal place of residence.
If the daughter sells the house, the sale proceeds would be countable.
If she is getting expanded Medicaid through Obamacare, her eligibility would be based on income. So, if the daughter rented the house or sold the house, the income that would be generated could disqualify her from continuing to receive benefits, depending on the amount of income she gets.
If the daughter is disabled, consider leaving the daughter the house in a special needs trust. With a special needs trust, there’s a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to enjoy trust assets without jeopardizing their eligibility for Medicaid.
A Medicaid Asset Protection Trust is an irrevocable trust, and assets placed in the trust are considered completed gifts to the beneficiaries, protecting the assets from Medicaid (after the look-back period of five years).
With a Medicaid Asset Protection Trust, even if the house is sold, the sale proceeds wouldn’t disqualify the daughter from receiving Medicaid.
Can a Medicaid recipient inherit my home? Ask an experienced elder law attorney for help with this situation as it can be extremely complicated, and you do not want to risk Medicaid eligibility for a loved one in most need of it.
The laws regarding Medicaid and Medicaid eligibility vary from state to state. Accordingly, nothing in this article should be considered legal advice. If you do not have a an elder law attorney to consult with, you can search for one at https://www.naela.org, the National Academy of Elder Law Attorneys. All three attorneys at Beck, Lenox & Stolzer are members and highly recommend naela.
Reference: nj.com (July 30, 2021) “What happens to my daughter’s Medicaid if I leave her my home?”
