Inheriting the assets of a succession may have a negative effect on any public benefit received by an heir or legatee. Many public benefit programs have an asset limit and exceeding that limit can create ineligibility for the assistance, at least for a period of time. For example, inheriting a share in a family home worth only a few thousand dollars can endanger the receipt of SSI and Medicaid benefits for disabled or elderly persons, unless the recipient or a co-heir (who does not own another residence) is residing in the property. This is a particular concern for nursing facility residents since their care must usually be financed by Medicaid. Housing assistance can also be affected by a succession. There are exceptions to the asset-limit rules, and the attorney should look at the regulations for the specific program or consult an attorney conversant with those rules in order to advise the client about the effects of the succession. This issue may arise in the situation where a forced heir inherits due to permanent disability. Ironically, the forced heirship laws designed to protect such disabled persons could end up creating a period of ineligibility for their health care programs.
Donating inherited assets to others or renouncing a succession may also affect an heir’s eligibility for SSI, Medicaid payments for nursing home care, and other public assistance. There are some options for establishing a Medicaid trust to protect an heir’s eligibility for Medicaid and SSI. Often this must be done as part of a will to avoid adverse consequences. Working with a reputable trust company is generally the best option for clients who are interested in a Medicaid trust.