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Inheritence & Medicaid

I am in the process of applying for Medicaid for my mother in SC who has dementia.

Three years ago her brother left her the family farmhouse in NY state. The will was never filed in probate court by the executor (her sister) and basically the properly was left sitting/"abandoned" because it was in bad disrepair and the inside of the house was full of junk. The tax assessment on the house is $35,600 but my aunt indicates the land and the house is not worth that much.

My uncle who owned the house was on Medicaid for 17+ years. Any proceeds that would be gained from the sale of the house would go to Medicaid. My mother stands to gain $0 as an "inheritence". I have a SC paralegal that tells me that for Medicaid purposes, my mother needs to accept the inheritence, sell the farmhouse for what it's worth and payback her brother's Medicaid benefits to Medicaid. If she does not do this, Medicaid will assess a penalty on her benefits for the value of the farmhouse.

How can my mother's benefits be impacted when she stands to gain $0 "inheritence" from this?
Status: Open    Oct 28, 2016 - 02:09 PM

Elder Law, Medicare/Medicaid

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Expert Answers

Nov 02, 2016 - 09:11 AM

The bad news is that you received pretty good advice. There are several questions though. Are there other siblings? Has anyone paid the taxes on the land the past 3 years? Did your uncle deed it to your mother or leave it in a Will? If you believe it to be in a Will that has not been filed for probate it might not be hers at this point and she cannot sell or give it away. If she is the only heir it could still be hers without any probate action.
The good news is (in most states) if the property is listed for sale, advertised for sale, is being actively marketed for sale it would qualify for a bonafied effort to sell real estate and not be counted as an asset of hers at this time. SC Medicaid would place a second lien on the property. When, if it is sold, and if any money came to her after the uncle's Medicaid lien is paid she would have to spend down those funds appropiately or those funds would go to Medicaid to repay any money spend on her care.
The safe route is to place the property for sale. You do not have to use a realtor (some states you do) but could list it on Zillow, Trulia or other for sale by owner method.
If the paralegal knew that much I would go that lawyer and discuss a plan.
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