It is not unusal to have a will or trust prepared in our office where the client requests that in the event they are not married or if they die without spouse or children that a parent receive some or all of their estate.  This could be a case of “watch out what you wish for” if your parents are entering or already are in their retirement years.

The easiest way to lose a government benefit under social security, including long term care benefits under the Medicaid program which pays for nursing home and some other types of skilled care, is receiving an inheretence!

Certain government benefits programs, such as Medicaid, look at a person’s “countable resources” to determine program eligibility.  The receipt of a gift or inheretence that puts a person over the $2,000 of countable resources ( this isn’t much) will cause an immediate loss of long term care benefits!

The way to correct this problem is to use a Third Party Special Needs Trust.  Leaving your parents or older loved ones property in such a trust allows your gift to supplement the govenment benefits; not supplant them.  Since long term care costs can run over $8,000 per year, merely using this type of trust in your estate plan allows you to still leave a gift and not cause a parent or older loved one from losing their benefits and insurance under the Medicaid program. 

This entry was posted on Wednesday, April 30th, 2008 at 5:33 pm and is filed under General, Disability Planning, Estate Planning, Long-Term Care Insurance, Medicaid, Nursing Home Issues, Retirement, Social Security. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.