How do I handle a bequest to an Alzheimer's patient on Medicaid?

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Can I simply pay the money over to the state?

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I think that unfortunately, the elder care attorney with whom you spoke didn't give you the best advice. Igloo's is better.

Ask the local bar association for a list of elder law attorneys, contact them and ask how much experience they've had with Medicaid.

Or search your state's bar association website and look for the elder law practice area, see if any list Medicaid experience as part of the practice area.
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I spoke with an elder care atty in NJ who suggested I contact Plan NJ, an organization who handles pooled trust in NJ. I contacted them and was told they were no longer accepting anyone over 65 but she would check with a supervisor. No one got back to me in spite of me leaving 2 more voice mail messages over 2 weeks. In the end, my only choices were to allow the distributions (probably around 50-75k) which would throw my mother off Medicaid until it was spent down or pay the state. I contacted the local office in the county where my mother resides and was given much the same information. For me, paying the state will be the most beneficial course of action for my mother to ensure that she can remain in the same room of the dementia unit at the facility.
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I'd suggest you contact asap the executor of the estate that your parent is getting the $ from to see when they are planning on doing the distribution of funds and ask if there is any possibility of delaying distribution for a bit. Usually executor has quite abit of discretion as to this. If there's quite a few getting $, it could be that everybody has to get their paperwork back to atty. or executor before any distribution done anyways, so a delay of a few weeks is fine.

Why? Cause you as the dpoa want to meet with an elder law atty. to see if something creative can be done with the $ - like a Medicaid compliant SNT - and get the paperwork at the ready so that when the $ flows through all can be done within the month received. So that they start the month within Medicaid income limits & then end the month within Medicaid limits. So the bequest never becomes an asset over medicaid limits for future months. I'm assuming this is a good bit of $ to make all this worthwhile.

If its maybe a modest amount - like under 15/20k or so, it might not be worth all the above effort. In that situation perhaps they might be able to do a fully paid preneed done for funeral, burial (within Medicaid allowed limits maybe 8 -12k) and then spend the rest on dental (easily thousands) or new better than provided by Medicaid wheelchair, new eyeglasses, hearing aids, extra clothing (if you have someplace to store these apart from the NH).

The new $$$ has to be fully spent within a month otherwise they go over medicaid income / asset caps. The situation happens often, this site has a ? just like yours every few months that's posted. Totally solvable with a bit of planning.
Good luck & let us know what happens. We all learn from each other!
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Don't know how much money is involved here but if it's more than the amount the person can have in resources (say over $2000, when added to.other assets), talk to an elder law attorney. This lump sum payment could possibly be put into some type of trust to be used for extra needs not covered by Medicaid, like new clothes or other items. Don't automatically think you will have to see it swallowed up and counted as income that may make the patient ineligible for benefits for a while.
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Contact Medicaid. Yes they will want the money. I am sure there must be a process to follow.
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