By Attorney Elizabeth Durnell
A few weeks ago, I met with Mary because her husband, Joe, was going into a nursing home. She and her husband, Joe, had previously worked with our office and everything was in place for them to apply to get Joe’s bill paid by Medicaid.
Everything looked to be in order until Mary informed us that Joe would probably inherit around $200,000 from his mother, Ethel. Being a beneficiary of a future inheritance is not a problem for Joe now, but it will be when Ethel passes away.
When Joe actually receives the money from Ethel’s estate, Joe will be kicked off of benefits and will lose a significant portion of the inheritance.
However, there is a solution to this problem. The Medicaid code allows Ethel to set up a trust after her death for Joe. The trust is for Joe’s supplemental needs such as going to the movies, taking vacations, buying a TV or other electronic equipment, etc. These needs are above and beyond what Medicaid pays. Therefore, Ethel can set up a trust for Joe’s benefit that allows him to continue to receive Medicaid after her death, that protects the inherited assets in the trust from creditors (including the State) and gives Joe the opportunity to enjoy his inheritance.
These trusts must be set up to comply with very specific guidelines or they could cause more problems than they help. If this is something you are interested in setting up a trust for a disabled family member, please contact the attorneys at the Thom L. Cooper Co., LPA to discuss if this is an option for you.