When mistakes are made concerning inheritances and Medi-Cal  (California’s Medicaid program), the cost could become significant. Those mistakes can be costly. When a person is drawing Medi-Cal benefits and inherits money or property, that inheritance jeopardizes the benefits. The inheritance must be handled carefully to minimize expensive penalties. What “careful” means, though, can be misunderstood without the necessary expertise.

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 Medi-Cal 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.

That advice would have been OK in the tax context. It was not OK in the Medi-Cal context. The Medi-Cal 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 Medi-Cal 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, Medi-Cal 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. 

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. Call on us. Please contact us or schedule a meeting to discuss your situation. We are here to help.

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Orange County Estate Planning Attorney Kevin SnyderKevin Snyder is a husband, father, and an Orange County estate planning attorney and elder law attorney at Snyder Law, PC in Irvine, California. He's all about family and passionate about estate planning, elder law, and veterans. He founded Snyder Law to help people be prepared and have the peace of mind they are protecting their families and aging parents for when life happens.

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