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Q&A: An inheritance sounds great, but what will it mean for my free meds?

July 29, 2024 By Liz Weston

Dear Liz: I live on Social Security alone, which puts me at the poverty level. The state pays for medical and dental premiums, so I have no copay for doctor visits or prescriptions. I was just notified that I was left $175,000. If this shows up in my bank account, I will lose all the medical benefits I’m receiving. My medications total $80,000 a year. I’d like to at least have some access to the funds to make some home repairs that I’ve needed for 20 years and to prepay my future funeral expenses.

Answer: Inheritances can wreak havoc with government benefits such as Medicaid (called Medi-Cal in California), which have strict income and asset limits. But you may have options to put the money in trust, says Jennifer Sawday, an estate planning attorney in Long Beach. Consult a special needs trust planning attorney for details.

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Filed Under: Inheritance, Q&A, Social Security Tagged With: Inheritance, Medicaid, special needs trust

Reader Interactions

Comments

  1. Fran Russell says

    August 2, 2024 at 2:52 pm

    Thank you Liz, I’d love to enter for the book drawing! I used to read your weekly colum in the LAT and since moving to Georgia (don’t ever do it) I love reading your on-line column!

    • Liz Weston says

      August 3, 2024 at 11:04 am

      Hi, Fran! Glad you’re enjoying the column. I haven’t done book giveaways for quite awhile now. If you can remember where you saw that on my site, let me know and I’ll delete it!

  2. JJ says

    August 3, 2024 at 12:50 pm

    The OP should consider a Medicare Advantage plan that covers dental and vision.

    • Liz Weston says

      August 3, 2024 at 3:06 pm

      MA plans might be okay if you’re healthy and remain that way. Not sure someone with an $80k pharmacy tab would qualify.

  3. JJ says

    August 3, 2024 at 12:52 pm

    Funeral trusts up to a modest amount are not counted as assets for Medicaid.

Trackbacks

  1. Q&A: An update on the inheritor trying to stay below the poverty line - Ask Liz Weston says:
    August 13, 2024 at 1:40 pm

    […] an update about a recent question in your column. A reader wrote that they had been low income but had recently inherited $175,000. You noted that Medicaid has strict asset limits. Actually, that is no longer the case in […]

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