Maintaining Medicaid Eligibility After the Death of a Spouse

It goes without saying that a spouse’s death is traumatic for the whole family. But for a surviving spouse who receives Medicaid benefits, it is even more stressful and harrowing as their eligibility for Medicaid may now be in jeopardy.

Under New York’s estate laws, a surviving spouse is entitled to the greater of $50,000 or one-third of the net estate of their deceased spouse, known as the elective share or "right of election." The net estate includes not just the probate estate, but also joint bank accounts or those with beneficiaries, most trusts, retirement accounts, and certain large gifts made within the year preceding death. When protecting assets for Medicaid purposes, it is common between spouses to disinherit the spouse who will receive Medicaid benefits. However, even a spouse who is receiving Medicaid benefits cannot be completely disinherited because of this right of election.

A right of election is considered a property right and an available resource for purposes of Medicaid eligibility. As such, if a Medicaid recipient’s spouse passes away or a Medicaid applicant is a recent widow, Medicaid will require the surviving spouse to file for their right of election. The right is exercised by a court filing in the Surrogate’s Court after the appointment of an executor or administrator.

Despite the added complexity, proper planning can help protect and preserve some or all of the inheritance for future generations. A required inheritance due to the right of election can be transferred to an irrevocable trust for a spouse receiving home care or included as part of a promissory note plan for a spouse residing in a nursing home.

It is easy to get overwhelmed by these daunting rules. The experienced Elder Law and Medicaid attorneys at Cona Elder Law are well-versed in navigating these issues and can guide you through the entire process.