Medicaid and Inheritances: Planning Ahead Is Essential

Last updated on: August 12, 2024

Addressing concerns about Medicaid and inheritances can be complex, with costly mistakes if not handled properly. When someone receives Medicaid benefits and then inherits money or property, it can put those benefits at risk. To avoid significant penalties, the inheritance must be managed carefully. However, understanding what “careful” means requires in-depth knowledge. Before making any decisions, it is important to speak with a Houston Medicaid planning lawyer.

Planning for Medicaid and inheritances is crucial to protect your assets and ensure your loved ones are cared for. At The Law Office of Whitney L. Thompson, our experienced lawyers can guide you through the complex regulations and help you create a strategic plan to safeguard your estate. We provide personalized solutions tailored to your unique needs. Contact us today at (281) 214-0173 to schedule a consultation and secure peace of mind for you and your family.

The Right Steps for Handling Inheritance

The first and best idea is to call experienced elder law attorneys like us. (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 this 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.

Medicaid Rules and Inheritance Context

That advice would have been OK in the tax context. It was not OK in the Medicaid context. The Medicaid rules count inheritances regardless of 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.

The better result would be to consult us immediately. We can advise you on the necessary techniques to split the inheritance between the recipient and somebody else, like a child. If the right strategies are used, Medicaid would 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.

How to Avoid Medicaid Estate Recovery in Texas?

Medicaid estate recovery can present significant concerns for beneficiaries and their families. However, there are strategies to protect your assets, particularly your home, from being claimed by the state after your death.

Transfer to a Spouse

One of the most effective ways to shield your home from Medicaid estate recovery is to transfer ownership to your living spouse. The state of Texas does not pursue recovery from the estates of surviving spouses, ensuring that your home remains with your family.

Transfer to an Exempt Individual

Another strategy involves transferring your home to certain exempt individuals. These include:

  • A Child Under 21, Blind, or Permanently Disabled: If you have a child who fits any of these criteria, transferring your home to them can protect it from Medicaid recovery.
  • A Sibling with an Equity Interest: If you have a sibling who has lived in the home for at least one year before your admission to a nursing home and has an equity interest in the property, transferring the home to them can exempt it from recovery.
  • A Caregiving Child: If a child lived in the home for at least two years before your institutionalization and provided care that delayed your admission to a nursing home, you can transfer the home to them to avoid Medicaid recovery.

These strategies require careful planning and legal guidance to ensure compliance with Medicaid rules and regulations. Consulting with a skilled Houston Medicaid planning lawyer can help you understand these options effectively, safeguarding your home and assets for your family. Contact The Law Office of Whitney L. Thompson today to explore your options and secure your future.

Exempt Individual Criteria
Child Under 21, Blind, or Permanently Disabled Child who is under 21, blind, or permanently disabled
Sibling with an Equity Interest Sibling who has lived in the home for at least one year before your admission to a nursing home and has an equity interest in the property
Caregiving Child Child who lived in the home for at least two years before your institutionalization and provided care that delayed your admission to a nursing home

Why You Need an Inheritance Lawyer

A Texas inheritance lawyer with experience can simplify the process of accumulating and distributing wealth for beneficiaries, family members, and heirs. Your lawyer will help you navigate the probate process, handle insurance companies, and work with real estate agents.

Your inheritance lawyer can deal with all of these matters, which will allow you to focus on other more complicated estates. Although many people fear that hiring a lawyer for these matters will be expensive, there are several flexible payment options available to your inheritance lawyer. Some lawyers will let you pay them out of the assets the lawyer collects or transfers to your beneficiary, heir, or family.

Inheriting Wealth

In the United States, more than $200 billion in inheritances are passed each year to beneficiaries. Wealth or obligations are often passed to children by their parents. This wealth could be land, jewelry, and stocks as well as businesses. This is done through wills, which must be filed with a probate judge to determine the proper heirs or beneficiaries. Without a will, the wealth is passed to the nearest relatives according to Texas law. An inheritance lawyer in Texas will be necessary to help you if the property is substantial. If a family member threatens to sue for the estate, a lawyer might be required.

Elder law is a law unto itself. We know that complicated area of the law well and we have helped many people successfully meet the challenges it poses. Please contact our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters.

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