Aunt in nursing home to receive inheritance

[pb4uski]

Hi, I'm looking to see if any of our esteemed members have run into this or a similar situation and get some advice as background before we see an elder law attorney.

Auntie M recently died. Auntie M had been negligent in not updating her will. Her will leaves her residual estate to her sisters that survive her. All of Auntie M's sisters predeceased her other than Auntie S who has severe dementia (but other that that is in fine health for a 93 yo) and is in a nursing home. Auntie S is indigent as Medicaid pays for the nursing home.

In the normal course, my understanding is that once Auntie S receives her inheritance from Auntie M she will no longer qualify for Medicaid and would become a private pay patient until her inheritance is exhausted, at which point she would again be eligible for Medicaid.

I know that Auntie M would roll over in her grave if she knew that her hard earned savings is in effect going to the government (I realize that technically it is going to Auntie S and her nursing home but the net outcome is that the government is the beneficiary since they avoid having to pay fo Auntie S's nursing home for a period of time).

From what research I have done it would not do any good for Auntie S to renounce her inheritance because it would be deemed as a substantive gift to her heirs.

However, I am wondering if we should try to delay the settlement of Auntie M's estate for as long as possible so if Auntie S passes before Auntie M's estate is distributed then the estate would go to Auntie S's heirs instead of paying for her nursing home care. Any idea if we did this whether Medicaid would claim that Auntie S's inheritance was an asset as of the date Auntie M died rather than when Auntie M's estate was settled?

 

[MichaelB]

You might want to ask an elder law attorney if there is still time to set up a special needs trust.

 

[jon-nyc]

Finding an elder law specialist in your state:

Finding a CELA | National Elder Law Foundation

 

[pb4uski]

Thanks and we certainly will consult with an elder law attorney. At this juncture, I am more interested in becoming educated about this topic so I can have an intelligent conversation with the elder law attorney and ask the right questions.

 

[MichaelB]

Thanks and we certainly will consult with an elder law attorney. At this juncture, I am more interested in becoming educated about this topic so I can have an intelligent conversation with the elder law attorney and ask the right questions.

The purpose of a special needs trust is to allow assets to be used for someone's benefit without them having ownership, so it does not prevent eligibility for other public programs. Your Aunt's situation is precisely what it is designed for.

If a special needs trust is no longer possible, the attorney should look at the will to see if there is any possibility of reassigning the assets so that she never takes ownership. Then, see how Medicaid regulations in her state are applied, and if they will change Jan 1 '14. Right now it is not clear if states implementing the new Medicaid regulations still have asset tests and mandatory spend-down requirements or not.

 

[Gatordoc50]

I believe that any assets left in the trust at death are used to " pay back" Medicaid. That would still be way better than paying the rack rate.

 

[redduck]

Aunt in nursing home to receive...

by Gatordoc50 ​

Other topicsPulled the plug yesterday!

by foxfirev5 ​

This doesn't seem quite right.

 

[MichaelB]

This doesn't seem quite right.

I'll admit to being a bit confused.

 

[Gatordoc50]

Aunt in nursing home to receive...by Gatordoc50 http://www.early-retirement.org/for...to-receive-inheritance-67752.html#post1344441

Other topicsPulled the plug yesterday! by foxfirev5 http://www.early-retirement.org/forums/f26/pulled-the-plug-yesterday-67731.html#post1344440

This doesn't seem quite right.

I don' understand. What are the green arrows?

 

[LazyErik]

Most states have a "survival period" which means that if Aunty S survives the decedent by so many days she has rights to the money. Even if she dies 120 days later her estate gets it. This is important. Almost every state has and enforced Medicaid liens. All of the past Medicaid benefits must be paid back before any heirs get a dollar. Some states are super aggressive about chasing down assets (as they should be ....because our taxes is paying for people.)
Yes talk to an elder law attorney, find one that truly understands the Medicaid system. Good luck.

 

[redduck]

Aunt in nursing home to receive...

by Gatordoc50 ​

Pulled the plug yesterday!

by foxfirev5 ​

This doesn't seem quite right.[/QUOTE]


OK, when I went to the FIRE website the first thing I saw was the "recent threads list". And, these two headings were the first two threads on the "recent threads" list. I thought they were an interesting back-to-back combination.

Now, I do apologize for not getting this post in more readable format, but for someone who got a "C" in typing in high school I think I did pretty well. The "C" by the way, brought up my GPA just a little bit. Too bad it was only a two unit course.

As for the green arrows (which I did not create), I think they indicate you have to go straight if you're in a particular lane. If you're confused about what the meaning of "go straight" is, please ask someone else.

Hope this clarifies the confusion.

Oh, I just noticed that at the moment of my writing this, there are 8 people viewing this thread (1 member ((me)) and 7 guests ((them)). I'm guessing that after the 7 guests finish reading this post they all will rush to become full-fledged members of FIRE.

OK, let's go back to the OP's question about his aunt in a nursing home who is to receive an inheritance. Sorry, pb4uski, I didn't mean to interfere with your thread.

 

[Larro Darro]

Redduck, you are like me. Your train of thought gets derailed easily. {but it did have the look of a bad joke}

As for the original post, it may be too late already. But if your aunt is healthy, and the money involved is worth it, you may want to bring her home. How many others would split the money when your 93 year old aunt dies? You all could work out some sort of time share. But that rarely works. It always seems the work falls on one family member.

When I was still in school, we took care of one of my grannies. Later, after I got out of the Navy we cared for the other one. There were several other children of each of these women, but it fell to us to care for both of them. And there was no money involved, it just had to be done.

 

[pb4uski]

Most states have a "survival period" which means that if Aunty S survives the decedent by so many days she has rights to the money. Even if she dies 120 days later her estate gets it. This is important. Almost every state has and enforced Medicaid liens. All of the past Medicaid benefits must be paid back before any heirs get a dollar. Some states are super aggressive about chasing down assets (as they should be ....because our taxes is paying for people.)
Yes talk to an elder law attorney, find one that truly understands the Medicaid system. Good luck.

While we will still talk with an elder law attorney from what I have read it sounds like at this point no matter how it is done that Medicaid will end up being the ultimate beneficiary of Auntie M's estate. If Auntie S lives and receives the inheritance that "income" will immediately disqualify her for Medicaid and from that point her assets will be too high until they are spent down through nursing home costs (Auntie S does not have a spouse or special needs child she could transfer the assets to). And even if Auntie S were to die prior to receiving the inheritance, from what I have read the inheritance would be considered part of Auntie S's estate and Medicaid would have a claim on Auntie S's estate for the support they have provided. So mo matter how you cut it, Auntie S's heirs will never benefit from Auntie S's estate (which is the inheritance received from Auntie M).

To my knowledge what Medicaid has paid for Auntie S's care so far would exceed the amount she will inherit from Auntie M.

From a public policy perspective it makes perfect sense that medicaid gets the money - I just wish that Auntie M had been more diligent in updating her will since it could have so easily been avoided.

This inheritance will be a major hassle for my cousin who manages Auntie S's financial affairs if Auntie S goes off and then needs to reapply to Medicaid. IF Medicaid will end up with the inheritance sooner or later, perhaps it might be easiest to just give the state the inheritance in exchange for them keeping Auntie S on Medicaid.

We'll definitely also look into special need trust and the changes eff 1/1/14 that Michael mentioned and see if the rules changes are helpful but I'm not optimistic we will find a better solution.

 

[obgyn65]

To the OP : please kindly contact a lawyer.

 

[Walt34]

We've just (in the last six months) been through the process of qualifying FIL for Medicaid for nursing home care with an elder law attorney. You will initially gasp/choke at the fee but believe me, in the long run he/she is going to be cheaper. It's a highly specialized area of law and they're worth it. The Medicaid application is literally the size of a medium-sized book.

State laws may vary but at least in MD the best you're going to be able to do is preserve half of the assets. But half a loaf is better than none.

I strongly recommend going to see an attorney who specializes in that area of law.

 

[pb4uski]

To the OP : please kindly contact a lawyer.

What is it about the first line of each of my posts in this thread that is so difficult for people to understand?

 

[obgyn65]

I think I understand your posts.

However, I also believe that many people posting here may be well intentioned but are not qualified to give legal advice. And the situation you describe certainly has legal ramifications . So be safe, get all the facts right, consult, and make the right decisions.

What is it about the first line of each of my posts in this thread that is so difficult for people to understand?