Inheritance and Medicaid

Updated on July 02, 2011
J.S. asks from Green Cove Springs, FL
12 answers

This seriously could only happen to my family, their luck is just that bad. My mom was working at a plant that closed and lost her job. This is the second time this has happened to her in five years. She qualified for a program to go back to college. Thinking that she didn't want to get another factory job and have this happen again, she went back to school. At the end of her first semester she finds out she has breast cancer..and of course has no insurance. My dad is a school bus driver, and just makes under what the cut off is for them to qualify for Medicaid. Mom hates it. She hates having to take what she calls "a hand out" but it's literally take it or die. She is scheduled for a mastectomy on July 6th.

So yesterday my step grandmother tells my mom that she might be getting a small inheritance from my great aunt, whom passed away last year. Here is the kicker, mom isn't sure she can take it because she is afraid that it will push her over the income limit for Medicaid. My grandmother is still settling the estate, she is unsure how much my mom will receive. Likely it won't be a large amount.
They obviously really need this money. Their house is crumbling around them, and after the huge system that moved through (the same one that hit Joplin) their front porch is about ready to collapse.

So here is my question, does anyone know if inheritance counts toward the Medicaid program? I researched this and all I have come up with is..maybe. It's really frustrating. It's a long shot but has anyone else had to deal with this? I just hate the fact that she has to deal with this on top of dealing with her cancer. I really hate the fact that I am 1000 miles away and can't to a damn thing to help. :(

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answers from Saginaw on

best thing to do for a correct answer is call medicaid and ask the "hypathetical" qestion. No names no major details and they should be able to help you!

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answers from Boston on

Many law offices give a free 30 minute consult. I'd seek out an estate attorney in the state your mother lives in a pose this question to them.

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answers from Seattle on

Your mom will be ok. I used to be an elder law attorney (still am I guess...but am staying home with my kids now). Technically, the inheritance will count as asset, must be reported to the county Medical Assistance agency, and could affect her Medicaid eligibility. HOWEVER, there are a number of items that you mother is permitted by law to spend the money on and if she does that within 30 days of receiving the money (approximately - you need to check your local rules), her Medicaid will continue uninterrupted and with no problem. If you need more specifics, you should call your local county assistance agency or an elder law attorney. By the way, one of the things the money can be spent on is home repairs/improvements so you might want to look at that. Also, paying outstanding bills is permitted so that is a good option too. Good luck.

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answers from Dallas on

it is income. it will have to be reported and taxes paid on it, so, it will be on her income tax return for 2011. so, i think the bottom line is it depends on how much it is. if it puts her over the income line, than it could be a problem. you can go to your states medicaid website to see what the income guidelines are for a family of her size.

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answers from Boston on

When my uncle died a few years ago his siblings inherited his estate. One sibling is retired and slightly disabled and was on Medicaid/Medicare and is awaiting subsidized senior housing. I know that the lawyer who assisted with the estate was able to advise them on how much the sister could inherit before it interfered with her benefits. The other siblings then technically inherited the remainder of the sister's share but the money is hers if she wants/needs it (it's not a huge amount, by the way). If there is an attorney handling the estate, this is a routine question that he or she should be able to answer. If there isn't an attorney, perhaps you could pay for them to consult with one. A consult on something simple like this should only be a couple hundred dollars. If she can't inherit the money, then perhaps another relative (such as yourself or one of your mother's siblings) to could inherit it for her and gift it to her. There are ways to do this that are perfectly legal - a decent estate attorney should be able to help you.

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answers from Portland on

Call the Social Security office and ask to speak to someone about Medicaid.



answers from Los Angeles on

oooh good question!!! I don't know...I would google it and find out...find out the state laws and what they deem as "income"...

I'm truly sorry your mom has breast cancer!! I HOPE that she becomes cancer free!!!

You will be in my thoughts and prayers.



answers from Gainesville on

You could call their local Medicaid office but the answer you will get will depend on who you talk to. It's extremely frustrating but true.

If it would push her over the limit in assets then she will lose her eligibility. She would probably be better served getting an appt with her local Legal Aid and let them research it. Is it possible for your grandmother to hang onto the money for them and basically pay for things for them out of the inheritance fund? That way it's not showing up as their assets but they still have access to it to keep up their house and such. I wouldn't normally advocate something like that but it's not like they are using Medicaid and planning an extravagant trip you know? It would be ridiculous for her to lose her Medicaid, spend down and have to start all over in a short amount of time since it's not like she's getting half a million $$ or anything.



answers from Oklahoma City on

Tell the older grandma to wait to disburse the inheritance until after the surgery.


answers from Spokane on

My parents just recently had to deal with this issue. I am on Medicaid with disability income and in their will they had to set my inheritance as a trust fund that in the event of their passing my brother would control my part of the the inheritance as the executor and I would have to get the money from him to use as I needed it. As long as it didn't go directly to me and was set up in a trust fund they were told that it wouldn't cause me a problem with eligibility. With that said each state may have their own laws so as everyone else has said I would check with the local Medicaid office or legal aid just thought I would throw out my situation in case it helped.



answers from Miami on

Maybe the money can be given to you in trust for your mom. Not sure how that will affect your taxes though. The best thing to do is consult a financial planner and find out. I am sure the extra money would push them over the limit to qualify for their benefits. You cannot even let any money go through her bank account. Cashier's checks maybe??



answers from Philadelphia on

I don't know the answer to your question but I would try to contact local legal aid and ask them if this is the case OR if there is another way to structure the inheritance so that it is not reportable income.....

Or just ask medicaid without giving them your names.

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