‘Spending Down’ for Medicaid Coverage: A Cautionary Tale

October 16, 2013

Medicaid is a need-based public benefit program that assists citizens in paying for medical care. Therefore, a person can only receive benefits if he or she meets certain income criteria. In order to meet the criteria, many people attempt to spend down their assets. However, if not done properly, a ‘Medicaid spend-down’ could have disastrous consequences. A recent article tells the story of Eugene Shipman, who ran into trouble after attempting to spend down his assets to qualify for Medicaid.

Centers for Medicare and Medicaid Services (Me...
Centers for Medicare and Medicaid Services (Medicaid administrator) logo (Photo credit: Wikipedia)

Shipman and his wife, Arline, began the spend down process in April of 2008, so that Arline would qualify for Medicaid coverage for her anticipated and impending care needs. As part of this spend-down, Eugene disinherited her in his will executed in March of 2009. Following the drafting of the will, Arline’s son, David – who exercised her power of attorney – disclaimed any inheritance from Eugene on her behalf.

Then, in 2010, Eugene unexpectedly passed away. Arline’s attorney scrambled to file a petition to claim an elective share of Eugene’s estate on her behalf. When the trial court denied the petition, Medicaid got involved and asked the court to reconsider. Luckily, the appellate court revoked the disclaimer and granting Arline the elective share.

Had the court determined that the disclaimer should not be revoked, not only would she have lost her Medicaid eligibility, but she would have also missed out on half of Eugene’s estate. The story of Eugene and Arline should remind individuals that they must seek competent counsel and take caution when involved in a Medicaid spend down.

Enhanced by Zemanta

Practice Areas:



Schedule your free Exploratory phone call

Click here to see how we
can be of assistance.

Payment Portal
for Tax and Accounting invoice

This link offers a secure, quick way to complete your payment with Omni360 Advisors LLC.

Our Social Media

Connect with us on Social Media using the following buttons:

Visit our Podcasts

Listen in, Join the Conversation!

Recent Posts

What Happens When Your CPA, Financial Advisor, and Estate Planning Attorney Work as One Team?

Discover how an integrated team of tax, financial, and estate planning professionals can help business owners and families make more coordinated decisions, reduce complexity, and ...

<p>The post What Happens When Your CPA, Financial Advisor, and Estate Planning Attorney Work as One Team? first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>

Why the Best Tax Planning Happens Before December

Tax planning is most effective before year-end. Learn how proactive strategies involving retirement contributions, charitable giving, capital gains, business deductions, and estate planning can help ...

<p>The post Why the Best Tax Planning Happens Before December first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>

Succession Isn’t Retirement: How Business Owners Can Build a Transition Plan That Protects Their Legacy

A successful business transition doesn’t happen by chance. Learn how succession planning helps business owners protect their legacy, preserve wealth, and prepare the next generation ...

<p>The post Succession Isn’t Retirement: How Business Owners Can Build a Transition Plan That Protects Their Legacy first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>