Medicaid Issues with Settlements
Let’s say that you were involved in a car accident or injured in some other type of incident. Your lawyer does good by you and you are looking at a large settlement. Then a thought occurs: I’m on Medicaid, will this settlement impact my Medicaid eligibility? YES.
If you are receiving Medicaid benefits, Medicaid does not allow you to have more than $2,000 in assets. Well, a settlement check in your bank account is an asset in the eyes of Medicaid and they will most likely stop your Medicaid benefits until you are back down to $2,000. Another thought occurs: Does this mean that I should not pursue my claim and receive a settlement? NO.
A settlement for your injury can be preserved in an irrevocable trust that is Medicaid approved and the assets in the trust will be used for your benefit. The trustee of the trust (which has to be someone other than the person for whom the trust benefits) is able to use the trust funds to supplement the needs of the Medicaid recipient. This can include purchasing a vehicle, a house, and even pay for the occasional vacation within reason.
As with most things, however, there is a catch. Medicaid only allows these trusts to exist because the terms of the trust have to provide for the repayment to Medicaid out of the trust funds upon the Medicaid recipient’s passing. The repayment to Medicaid is up to the amount of money Medicaid has paid for the benefit of the recipient. If there are insufficient funds left in the trust to fully pay back Medicaid, Medicaid WILL NOT come after your family to recover the difference. If there are sufficient funds left in the trust to fully pay back Medicaid with additional funds left over, those funds can be part of the Medicaid recipient’s estate to be given to their heirs.
If you have questions about the impact a settlement will have on your Medicaid benefits, contact Carpenter Law Office. With our 40+ years of experience, we have helped numerous individuals protect their necessary benefits during injury settlements. Call us at 918-298-1001 or set up your free consultation today.