Magazine article The CPA Journal

Medicaid Eligibility Aspects of Disclaimers

Magazine article The CPA Journal

Medicaid Eligibility Aspects of Disclaimers

Article excerpt

Financial planners may be unaware of the issues surrounding the New York State Medicaid eligibility when dealing with post-mortem disclaimers. When an individual, including a surviving spouse with a right of election, has a right to a share of an estate and renounces or disclaims such interest, it is considered a transfer for Medicaid eligibility purposes.

A common scenario involves one spouse that is well and living at home while the other spouse resides in a nursing home receiving Medicaid benefits. If the well spouse dies first and does not leave the surviving spouse enough to qualify as that spouse's elective share (the greater of $50,000 or one-third of the estate), the local Medicaid agency may start a court proceeding to have a guardian appointed for the surviving institutionalized spouse so that the guardian can then exercise that spouse's right of election. As a result, part of what may be Medicaid-oriented planning should include both spouses, only if they have the requisite mental capacity, executing waivers of their right of election. …

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