Estate Recovery and Special Needs Trusts
Other situations include grandparents, very well intentioned grandparents wanting to help out their grandchild that they know has special needs. Often times we’ll see a specific gift of twenty thousand dollars that goes directly to the child. If it goes directly to the child and the child is on the Deeming Waiver, you’ve lost the deeming waiver until that money is dealt with. These are all situations that need to be addressed and sometimes other family members or friends want to include the special needs child in their planning and if they leave it directly to the child they’re gonna cause problems, the money that they want to help the child with causes more problems than it’s worth, depending on the size of the gift. The other issue now is estate recovery. About a year ago, Medicaid sent out letters to everybody and I know all those who received deeming waiver were also getting these letters. It was causing a great deal of confusion because it was addressed to the parent, and it said “upon your death, we have acclaimed for whatever money we have spent on the Medicaid recipient” and parents said, now, wait a minute, I thought they weren’t going to include my assets. I was at a presentation similar to this up in Rome and the person speaking before me was a representative from SSI and she was explaining that yes, we are going to when you pass away, we are going to collect from your estate up to the amount that we have paid for your child. That is absolutely wrong but boy it set me up really nicely. Everybody in the room was like “what do we do?” she was inaccurate, she did not fully understand what estate recovery means. Estate recovery goes against the assets of the Medicaid recipient. Medicaid has an automatic lean on the estate of everybody who ever receives Medicaid. This includes mom in the nursing home, this includes your child on the deeming waiver. One way to avoid estate recovery is not having any assets in the estate of the Medicaid recipient, which would further argue why you should not have any assets in the name of the child with special needs, rather have it in a trust. Assets in the trust, a special needs trust, are not in the estate of the beneficiary. I hear other attorneys going “you know, the house is not a countable resource, so you can leave your child the house.” They are absolutely right, you can leave the child the house it’s not a countable resource, the child can live there. What happens if the child can’t live there anymore? It becomes a countable resource. What if we have to sell the house? It becomes a countable resource. What happens if the child passes away? Estate recovery. They take the house. But, there’s a way around it. Any assets that are in the name of the Medicaid recipient are subject to estate recovery.
Nadler Biernath LLC assists clients in the Atlanta, Georgia area and throughout Georgia including Kennesaw, Alpharetta, Roswell, Marietta, Buckhead, Johns Creek, Duluth, East Cobb and Dunwoody.