When a beneficiary is a Medi-Cal recipient and she’s set to get a bequest of the grantor’s home in her last will, the question may arise about the impact on her Medi-Cal benefits.
The answer will depend on the Medi-Cal program and what the daughter decides to do with the house, says nj.com’s recent article entitled “What happens to my daughter’s Medicaid if I leave her my home?”
Medi-Cal (California’s version of Medicaid) provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities.
In some states, Medicaid covers all low-income adults below a certain income level.
Medicaid programs are required to follow federal guidelines, but coverage and costs may be different from state to state.
Here, if the daughter is a Medi-Cal recipient because she also receives SSI or has ABD Medicaid, the house will not be counted as a disqualifying asset if the house is the daughter’s principal place of residence.
If the daughter sells the house, the sale proceeds would be countable.
If she is getting expanded Medi-Cal through Obamacare, her eligibility would be based on income. So, if the daughter rented the house or sold the house, the income that would be generated could disqualify her from continuing to receive benefits, depending on the amount of income she gets.
If the daughter is disabled, consider leaving the daughter the house in a special needs trust. With a special needs trust, there’s a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to enjoy trust assets without jeopardizing their eligibility for Medi-Cal.
A Medi-Cal Asset Protection Trust is an irrevocable trust, and assets placed in the trust are considered completed gifts to the beneficiaries, protecting the assets from Medi-Cal (after the look-back period).
With a Medi-Cal Asset Protection Trust, even if the house is sold, the sale proceeds wouldn’t disqualify the daughter from being a Medi-Cal recipient.
Reference: nj.com (July 30, 2021) “What happens to my daughter’s Medicaid if I leave her my home?”
Suggested Key Terms: Elder Law Attorney, Special Needs Trust, Medicaid Trust Planning, Medicaid Planning Lawyer, Disability