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Inheritance and Medicaid: Be Careful, Plan Ahead

How to prevent costly consequences from making bad decisions about inheritance and Medicaid

Mistakes can be made when it comes to inheritance and Medicaid. Those mistakes can be costly.

When a person is receiving Medicaid benefits and inherits money or property, that inheritance jeopardizes the benefits. The inheritance must be handled carefully to minimize expensive penalties. What “careful” means, though, can be misunderstood without the necessary expertise.

Inheritance and Medicaid: What You Need to Know

If you are a resident of Maryland or the District of Columbia, your first and best idea is to call Andre O. McDonald, an experienced elder law attorney. (An even better idea is to call us well before any inheritance becomes a “problem.” The sooner you call us, the more money we can likely protect for you.)

An Ohio attorney was recently suspended partly because he mishandled a client’s Medicaid-inheritance issue. The mistaken advice was that to protect the benefits, the person who stood to inherit should “disclaim” or “renounce” the inheritance – in other words, give it away to someone else.

That advice would have been OKAY in the tax context. It was not OKAY in the Medicaid context. The Medicaid rules count inheritances regardless whether the recipient keeps them or passes them on to someone else. The bad result, in such cases, is that the person receiving Medicaid would be charged just as if he or she had taken the money, even if he or she gave it away, and the person’s benefits would be docked accordingly. This can be a very expensive misstep.

If you, a friend or a love one are in a similar situation regarding inheritance and Medicaid, the better result would be to consult  McDonald Law Firm – immediately. We can advise you on the necessary techniques to accept the inheritance while maintaining your Medicaid benefits. If the right strategies are used, Medicaid may count the inheritance to an extent, but not as much as it would have if the recipient had simply given away the whole sum.

An even better result would be if the person leaving the inheritance had consulted us first. We know how to structure that person’s financial arrangements, to protect the people to whom the person wants to leave his or her legacy.

We are here to help.

Elder law is a law unto itself. At McDonald Law Firm, we know that complicated area of the law well and we have helped many people successfully meet the challenges it poses. If you have any questions about something you have read or would like additional information, please feel free to contact Andre O. McDonald, a knowledgeable Howard County, Montgomery County and District of Columbia estate planning, special-needs planning, veterans pension planning and Medicaid planning attorney, at (443) 741-1088 or (301) 941-7809, to schedule a consultation.


DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.

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For help with estate planning, special needs planning, elder law or Veteran's Pension Planning needs throughout Howard, Montgomery, Prince George’s, Anne Arundel, and Baltimore County; and Baltimore City, contact McDonald Law Firm, LLC.

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McDonald Law Firm, LLC

Columbia Office

10500 Little Patuxent Pkwy, #420
Columbia, MD 21044-3563

Bethesda Office:

(By Appointment Only)

7315 Wisconsin Avenue, Suite 800 West
Bethesda, MD 20814

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