inheritance and medicaid

[mylilies]

What is the name of your state (only U.S. law)? Ohio
My 58 year old cousin keeps asking my advice and I don't know what to tell him. He will be receiving an inheritance of about $150,000 shortly and is currently on SSI and Medicaid. He talked to a lawyer who said he could set up a special needs trust. He would like to be off government assistance, but is worried about his health care insurance costs. He doesn't know what to do and neither do I. Could someone help us decide between just taking the money or putting it in a special needs trust? Thank you.

[mylilies]

Wow! 187 views and nobody answered me.

[Proserpina]

Originally Posted by mylilies

Wow! 187 views and nobody answered me.

Your cousin needs to speak with an attorney and/or financial advisor. Nobody can decide for him, y'know?

Sorry - I'm not entirely sure what else you want to hear?

[ajkroy]

Your cousin can research health insurance plans or ask his doctor for a recommendation. If he is on a variety of meds, he can check which meds are covered by what plan, if that helps. $150K will pay for a lot of premiums, deductibles, copays/coinsurances and prescription costs.

Once he inherits, he won't have the option of continuing Medicaid, regardless of what type of account the money sits.

[Onderzoek]

[url]https://secure.ssa.gov/apps10/poms.nsf/lnx/0501120201!opendocument[/url]

This is an extremely complex issue and he should not rely on anyone in this forum or anything you find out or even any lawyer who is not a Medicaid expert. Generally a trust established with his own funds are considered a countable resource. Once he inherits, the money is his. If he transfers it to a trust, he has transferred his own money. It is doubtful that he could establish a valid special needs trust that will meet the requirements to be excluded.

He could inherit and live on the money until it runs out. He could buy health insurance (and depending upon what happens in the Senate, he may soon have many choices) and pay co-pays like everyone else who does not get public assistance. If he is used to living on $674 a month SSI, $150,000 could last 18 years, except that now he has to pay for things that used to be provided by the taxpayers through assorted low income programs.

At age 65, he can be eligible for Medicare if he has 10 years of work in his lifetime and pay the premium for part B or buy Part A (expensive) if he doesn't have 10 years of work. That is only 7 years away.

If he uses the money to live on and eventually outlives his savings or spends it faster than expected, he can always reapply for SSI benefits. If he is 65, all he has to do is prove age. If he is under 65, he would have to prove disability, but that is not hard for a 60 year old to do.

One thing I would recommend he not do is to share his wealth with needy 'friends' and relatives who suddenly appear with their hands out. There is nothing wrong with him looking out for his own interest first, and looking to his own security. I agree that he should be off of public assistance and taxpayer dollars when he has money of his own.

He needs to learn how to manage this money, how to keep it safely invested, not choose some get rich quick scheme that will be presented to him. There are ways to invest that are safer than others and at his age, protecting his capitol should take priority over something more speculative. And never invest in something you don't understand. Never.

Does he have a house? Can he buy a nice little home in your area with this money? How about a mobile home? Can he afford to maintain a home if he were on SSI, pay for roof repair, furnace replacement? Would he rather stay a renter or does he live with others? Does he already own the home he is in and needs to repair it? Does he have decades old washer/dryer, refrigerator, beat up sofa, holey mattress? SSI does not count the value of a home and its furnishings as a resource. Has he pre-paid his funeral expenses. SSI disregards all burial space items and $1500 of burial funds.

Lots of decisions to make. And don't rely on strangers in a forum.

[mylilies]

Thanks to you who took the time out of your busy day to answer me, especially to Onderzoek who put a lot of thought into his answer.