Disclaiming isn't always possible. This article explores recent developments in Medicaid law, some disclaimer situations in practice, and effects of forced elective shares on Medicaid benefits. Because of the programs that Medicaid offers, many in Florida worry that having an inheritance may disqualify them from getting Medicaid in the state. 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. Here in WA, disclaimer of an inheritance would be considered transfer of a resource that would disqualify her. My Stepfather- and mom-in-law were upside down on their quad home, cc debt in the thousands, had a 15-yr old beater van, no healthcare, no pension, had absolutely no savings or property or investments and their monthly ss barely covered their . Sometimes, an heir or beneficiary who is dependent on state or federal programs such as SSI or Medicaid for assistance decides that disclaiming an inheritance is necessary. 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. You or whoever is representing you will have to inform the state Medicaid agency, and Medicaid coverage will then end until . If the heir is receiving government benefits—for example, Medicaid is paying for a nursing home, or they are an adult with special needs —an inheritance could jeopardize their eligibility. ., , , , Δ. Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. 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. Do not sign a renunciation of your interest in the inheritance (or on behalf of the individual) - a renunciation is considered exercise of control over the asset which Medicaid views as a gift. An inheritance will be counted as income in the month it is received. Disclaiming means that you give up your rights to receive the inheritance. If you have enough financial resources to form any sort of inheritance, you probably won't qualify. If, at the end of the month, the individual still has more than $2,000.00, they will need to pay privately for their care until they are back below . correct that your inheritance may affect your eligibility for SSI/SSDI and/or Medi-Cal/Medicare. If the disclaimer is signed before death, there is no transfer. It was not OK in the Medicaid context. To avoid this from happening, you have a couple of options. An inheritance will be counted as income in the month it is received. If she's on SSDI and Medicare, then her income and assets do not matter. Next, deliver the disclaimer to the person controlling the distribution of the estate, either the executor or the trustee. If she's on SSI or Medicaid or even food stamps, then it does. December 3, 2021December 3, 2021 By Gali. An Ohio attorney was recently suspended partly because he mishandled a client's Medicaid-inheritance issue. "But because of Medicaid's disqualification rules, you may lose your Medicaid benefits," says Neel Shah, an estate planning attorney and financial advisor/owner at Beacon Wealth Solutions. 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. Worry not, having an inheritance will not disqualify someone from obtaining Medicaid, but by the same token, one cannot disclaim an inheritance to qualify for Medicaid. The disclaimer must be in writing: A signed letter by the person doing the disclaiming, identifying the decedent, describing the asset to be disclaimed, and the extent and amount, percentage or dollar amount, to be disclaimed, must be delivered to the person in control of the estate or asset, such as an executor, trustee, or custodian. Many individuals with disabilities rely on Medicaid as a much-needed source of health insurance, and they can also receive Supplemental Security Income If you have person with a disability on your inheritance list, you could establish a supplemental needs trust. In fact, the answer is yes - it is possible to "disclaim" inheritance rights and have the assets you were supposed to inherit distributed . However, if the recipient is on Medicaid, that inheritance can cause problems, particularly if they are in a nursing home paid for by Medicaid. Here is why. Can Medicaid take away an inheritance? Certain actions you take could prevent you from being able to disclaim your inheritance. It was not OK in the Medicaid context. 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. By declining an inheritance, to Medicaid, is tantamount to giving assets away (which subjects the Medicaid beneficiary to a disqualification penalty period). That advice would have been OKAY in the tax . Sometimes an inheritance is an unexpected surprise. The entire inheritance would be placed into a Medicaid Compliant Annuity holding a payback period identical to that of the individual's Medicaid life expectancy. However, disclaiming may not always be possible—if an heir is already on Medicaid, the state-run health program will likely contest an attempt to disclaim an inheritance that—if claimed—would make the individual ineligible for Medicaid. 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. Disclaiming inheritance is a relatively simple process. "Disclaim" the inherited retirement account. It was not OK in the Medicaid context. Receiving an inheritance can provide a financial windfall, but there are some scenarios where you may prefer not to receive one. After Aug. 11, 1993, a disclaimer of inheritance may result in a transfer of assets penalty regardless of the date the disclaimer is signed or effective. Medicaid Rules and Inheritance Context As for what assets could potentially go to your children, if your wife were to "disclaim" or refuse the inheritance, this would be considered a transfer of assets and would result in a penalty . 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