I am dual eligible. A friend's will is leaving me $10,000. Can I pay credit card debt as part of my spend down?

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I have more than $10,000 in credit card debt.

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Many, many thanks to the folks who provided answers and solutions for my small inheritance. You have given me lots to consider. Probate isn't for another month so I have time to investigate my suggested options.
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Make sure you have and KEEP ALL CHECKING ACCT/ OTHER ACCT RECEIPTS FOR THE 5 YR LOOKBACK!!!!
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I forgot to say that if you have more debt than your inheritance can cover, you may not want to spend all of your inheritance money on that. Remember, this may be your last chance at a real financial break, so find very constructive ways to enjoy the money and to help yourself to live a better life if you happen to be scraping financially and barely making it. My bio dad died and left behind and it a life insurance policy, and the insurance company is yet to pay out because they're dragging their feet. This is why I got my states department of insurance involved because I'm the only one left in my bio family. It makes me think the insurance company is actually taking advantage of a very unfortunate situation, and come to find out that insurance company actually got a terrible rating, I saw the ratings and reviews for uniCARE life insurance for Ford Motor retirees. You may see this for yourself, this is why I got my states department of insurance involved, and they can make this place do the right thing
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For those of you wondering, my first answer to your question about a POD account is that it is called a "Payable on Death" account. This can be used toward your final expenses. Just make sure to mention it in your will along with its whereabouts.

Now, as for dealing with a spend down, again, you can get a car with that model if you absolutely need one. If you don't have a car, now would be the perfect time to get one if you already have your inheritance money.

As for setting aside money for emergencies, this is a very smart move, especially in a world where so many people are hurting financially. When you inherit money, it's up to you aside money for a rainy day. Let's say you're always scrape and financially toward the end of each month because Social Security just isn't enough to live on. This would be a perfect time to set aside some money and even start a few CDs or even an annuity. Check with your bank to explore your options.

If you use a trust, make sure that you absolutely and completely trust your trustee. I spoke with spoke with a lawyer in my state, only to discover that there is nothing stopping a trustee from abusing you financially. This is the downfall of a trust, because when you turn your money over to a trust, you surrender ownership to that person who now owns your money. Surrendering money to a trust means you no longer own that money. This is rather risky. That's why more and more people are turning away from using a trust and finding alternate ways to protect their money and assets. In some cases, a trust can be very beneficial for protecting elders and other age groups against fraud such as what scammers do. Anytime you decide to use a trust, you do so at your own risk. This may be why some people just won't sign anything, (and I don't blame them). This can be a good thing to some great degree. However, this can also be a bad thing in certain situations as we all know. This is why we must all use serious discretion where money and assets are involved.
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MizEllie, if you are already on Medicaid, contact your caseworker, because you have to report the $10K. Rules vary from state to state, so you need to know the specific rules for your state. In Wisconsin
• Countable assets maybe converted to an income stream by the purchase of a Medicaid qualified annuity
• Countable assets may be made unavailable by loaning money to children in exchange for a qualified promissory note
• A divestment with a qualified partial cure arrangement may reduce a Medicaid spend down from 100% to 50% of the applicant’s countable assets (e.g., reverse half-loaf technique)
• Establish “Special Needs Trust” through a “Pooled Trust” managed by a non-profit association such as WisPact or WISH Pooled Trust.
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After doing much research i think we need to know what kind of spend down are you talking about? Do you have a monthly spend down as innerchild referenced or are you talking about spend down to quilify for nursing home coverage. There is a big difference and the answer will be different depending on which spend down you are refering to.
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Kudos to all for comments.....I went through a TON of work and getting financial records collected in our spenddown. Spenddown in my state has nothing to do with excess income...it has to do with assets over a certain amount...It is way too complicated for me to explain here. In summary, the community spouse is allowed to keep half of assets owned by either self or spouse or jointly, but not more than about $120,000 in total kept by community spouse (the one still at home). My advice is go to a qualified attorney....We visited three who didn't know their way out of a paper bag. In my state Medicaid has to be applied for before the spenddown of assets commences. (note to poster earlier. The lawyer I mentioned was not trying to get my spouse impoverished...He thought he was suggesting that, but he didn't know the rules.)
There is no upper limit in my state of income for the community spouse, just for the Medicaid applicant..It is very complicated.
Grace + Peace,
Bob
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Hi chunkiemunkie! I reside in Michigan. I should have mentioned that, as Medicaid varies from state to state. Yes, "spend down" in amount of income you are over the threshold to qualify for Medicaid. Other terms may have been changed since I was familiar with 'benefits', but yes, otherwise what you wrote is true for Michigan. Last I knew, it was $2,000 in assets for Michigan.
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My Aunt was on SSI and medicaid for hospitalization. She was able to live in her own home. At that time you were allowed 1500. She used $500 of the $1500 to repair her car. Medicaid called and wanted to know what the $500 was for. They told her they needed to know when she planned to pull out money she had to call them. So, the money is yours but isn't.
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HI innerchild!
I am in Nebraska and it is $4,000 for a single. What kind of spend down is is being referred to here? In Nebraska, we refer to a "spend down" as the amount of income that you are over the threshold for qualifying. You must then appropriately spend it down; i.e. funeral, insurance, etc. We call what you are referring to "Share of Cost". When you qualify for some benefits, but must pay a certain amount of your medical bills each month before they kick.
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