An inheritance disqualified someone from Medicaid?

McNair Dallas Law

House inheritance for Medicaid Beneficiary

My daughter is on Medicaid. If I give her my home in my will, what will happen to her benefits?

Many times I have worked with individuals who were disqualified from Medicaid when they inherited cash, assets, or property.  Not only do they lose their health insurance, but for those receiving Nursing Home Medicaid, they can lose their place to live.  This problem can be avoided with some advanced planning by an experienced elder law attorney.

Whether or not the inheritance impacts the Medicaid benefits depends on the type of Medicaid program and the way the inheritance is received says nj.com’s recent article entitled “What happens to my daughter’s Medicaid if I leave her my home?”

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, but not in Texas.  Medicaid programs are required to follow federal guidelines, but coverage and costs are different from state to state.

If the daughter receives Medicaid because she also receives SSI or has ABD Medicaid, receiving the house as an inheritance 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 countable resources that would disqualify her from Medicaid benefits.

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).  With a Medicaid Asset Protection Trust, even if the house is sold, the sale proceeds wouldn’t disqualify the daughter from receiving Medicaid.

Ask an experienced elder law attorney for help with this situation.

The laws regarding Medicaid and Medicaid eligibility are extremely complex and vary from state to state. Accordingly, nothing in this article should be considered legal advice.

Reference: nj.com (July 30, 2021) “What happens to my daughter’s Medicaid if I leave her my home?”

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