Ask Nick Your Estate Questions

I have a son with cerebral palsy who resides in a nursing home, which is paid for by the Medicaid program.  I want to leave my estate to him, but heard that will disqualify him from Medicaid.  Is there anything I can do to safely benefit my son?

            A person on Medicaid who inherits money (as well as supplemental security income and other needs based government programs) will be disqualified from the program until the inherited money is spent on their care.  Instead, you should devise your estate to a supplemental care trust for the benefit of your son.  Assets devised to a properly drafted supplemental care trust will not be treated as belonging to your son and, therefore, will not disqualify him from receiving future Medicaid benefits. 

            The assets in a supplemental care trust can only be used to supplement or enhance the benefits that your child receives from Medicaid.  Therefore, the assets cannot be used to pay for expenses that Medicaid already covers.  So, for example, trust assets can be used to pay for recreation, transportation, hair care, the differential in cost between a “Medicaid room” and a private room, an electric wheelchair instead of a manually operated wheelchair, and supplemental nursing care which is not paid for by Medicaid.  

            A qualified trustee needs to be named by you to manage the supplemental care trust for your son’s benefit.  It is critical that assets not be distributed before considering if such action would harm the beneficiary’s ability to maintain Medicaid benefits.  It is also important to ensure that the third party provider is paid for the services rendered to the trust beneficiary.  Money from a supplemental care trust should never be given directly to the beneficiary by way of cash, check or otherwise.

            A supplemental care trust is a complex, but very useful, estate planning tool, to ensure that a disabled heir receives the benefit of an inheritance without suffering the hardship and indignity of being disqualified from receiving government benefits. 

Nicholas Giuditta is a trusts and estates attorney in Westfield.  He prepares estate plans for high net worth individuals and regularly represents executors and administrators of estates.  Find out how your family can benefit by contacting Mr. Giuditta at 908-232-0099 or visit his website at www.giudittalaw.com.