New Jersey Medicaid Benefits Jeopardized By Accidental Inheritance

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Medicaid Attorney

New Jersey Medicaid pays Mom’s nursing home bill each month. Dad dies suddenly while mom is still alive and still living in the nursing home. She is the beneficiary of Dad’s life insurance policy and she’ll be getting $75,000. That will put her over the asset limit for Medicaid. Will she get thrown out of the nursing home?

The answer is no,…but!

She will not be thrown out of the nursing home, but certain steps must be taken to avoid losing Medicaid benefits. The exact steps depend on a number of factors. This is a tricky situation and many counties treat the situation differently. She really needs to see an Elder Law Attorney without delay to discuss what can be done. If the mother is cognitive and willing, she may be able to take those steps herself to deal with the insurance proceeds so as to maintain her Medicaid coverage.

Then again, if mom is not competent then someone legally authorized to act on her behalf will be needed. Does she have a Durable Power of Attorney naming a child or other person as her agent? If so, he/she may be able to take steps on her behalf. Of course, what they are able to do will be limited by the scope and nature of the powers that document gives them.

At this time the family should also determine if mother’s income will increase as a result of her husband’s passing. If her monthly income exceeds $2,205 she will need a Qualified Income Trust established in order to retain her New Jersey Medicaid benefits.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.

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