Is Childrens Inheritance Considered Gift Resulting in Medicaid Penalty Period?

Husband dies and leaves everything to children and charity.

Wife can live comfortably on social security and pension. In 2 years she needs to go to Nursing Home. Can she qualify for Medicaid?

Or is the children's inheritance considered her gift and there will be a penalty period?

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May 04, 2011
Elective Share is Gift Subject to Medicaid Lookback Rule
by: Gabriel Heiser

While it is true that a gift by one spouse is also counted for purposes of the other spouse's Medicaid eligibility, here the transfer was made by a deceased spouse. The only "gift" would be the amount of the husband's estate that the surviving wife was entitled to under state law but did not receive.

All states have laws called "elective share" or "spousal share" laws that require a minimum percentage of the estate of the first-spouse-to-die to be left to the surviving spouse. In some states it is one-third, while others use an increasing percentage: the longer the marriage, the higher the percentage that must be left to the spouse.

You need to check what the law is in your own state and calculate the share amount. Whatever the amount was that the wife was entitled to under this law but did not receive would be deemed a gift to the children, subject to the five-year lookback rule.

You can read other medicaid questions and get answers from Gabriel Heiser at Medicaid Secrets Forum.

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