Sheffield, AL asked in Contracts and Estate Planning for Alabama

Q: I am my brother's legal guardian. He relies on Medicare to pay his nursing home. He was omitted from Dad's will.

If he receives any money Medicare will take his benefits away. Dad died without taking brother's name off insurance as beneficiary. I can disclaim his insurance benefit, but what happens to his benefit if I do? How long is any disclaimer in effect? What can I do to prevent Medicare from removing his nursing home allowance?

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2 Lawyer Answers
Nina Whitehurst
Nina Whitehurst
PREMIUM
Answered
  • Estate Planning Lawyer
  • Crossville, TN

A: You probably mean Medicaid not Medicare. The disclaimer would be considered an uncompensated transfer and your brother willl incur a penalty period. There are better ways to handle this. Consult with an elder law attorney in your area. Most likely you will be looking at a strategy that combines gifting with a Medicaid-compliant annuity. It is all about crunching numbers. Skilled elder law attorneys know how to do this.

Jack T. Carney
Jack T. Carney
Answered
  • Estate Planning Lawyer
  • Birmingham, AL
  • Licensed in Alabama

A: If your brother is on Medicaid in Alabama the best solution may be a special needs trust. He could keep the assets and they would be available through a Trustee for his benefit. As the trust is a special needs trust, he would not lose government benefits. As with most legal cases, so much depends on the specific facts (e.g., your brother's age, his health and the amount in question). A good resource may be the Alabama Family Trust, which you can learn about at: https://www.alabamafamilytrust.com. Finally, I do echo Nina's suggestion that it is important to consult with an attorney with specialized knowledge of this area of the law. Good luck!

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