Living in Connecticut, my daughter has been on Section 8 rental assistance, State medical aide and food stamps for 15 years since she became divorced and was taking care of her son alone. I own a small condo and have placed her in my Will along with my son to inherit the proceeds from the sale of my condo when I pass away. Will the State of CT. step in and make her pay back the money that they contributed to her support for the fifteen years? That would be a shame since this inheritance, which is not much, under a hundred thousand, would give her a chance to get off the Welfare roles and live a normal life. Please Help.
First and not to sound harsh but is there a reason you are thinking you are dying soon so that whatever is in your will will be an issue in the near future?? and second, just how does Connecticut's Medicaid and its estate recovery program (aka MERP or MERS) deal with a claim or a lien on a property inherited or proceeds from the sale of a property inherited?
On the first part, assuming your demise is not around the corner (hopefully!), a lot could happen between today & death and the terms of your will come into play. Things change……you could sell the condo 5 years from now and move into an apt. You could fall in love with a cute 85 year old and move in with them! If you yourself end up needing care and the costs of care are beyond what you can afford or family can do, it's likely that you would go into a facility & apply for Medicaid. 60-70% of those in a facility are on Medicaid. If so, state could place a lien of claim against that condo as all states have to have a recoup / recovery program if you are on Medicaid. it won't matter what's in your will. Condo - which if its primary residence - you can keep and be on Medicaid as rules are now. This sounds all fabulous BUT problem often for family is that ALL the elders asset $ must be first spent down to be eligible for Medicaid & all monthly income (SS) used as required co-pay / SOC (share of cost) paid to NH ea month. Elder has no $ realistically anymore. So to keep condo, family will have to front all condo costs from day 1 of your Medicaid and through the probate process and your heirs will need to deal with MERP. Your daughter is low income so probably feasible, so what about your son? would he do this on a property for who knows how long that at best would only be 50% his? It's going to be pretty cumbersome imho and who knows what dealing with estate recovery will be years from now.
If your son & your daughter are the only heirs, each of them will have to qualify & be able to document why each of them gets some sort of exemption or exclusions in order to get out of estate recovery. Could be a real cluster to deal with & perhaps not successfully.
Then on second part, lets assume 100K condo gets sold after you die & you were not on Medicaid. No recovery MERP issues. Proceeds from sale gets split between your kids. Daughter inherits 50K reportable income & now off state assistance as income too high to qualify. I wouldn't worry about estate recovery for her as the MERP program is set up - I'm pretty sure - limited for those on Medicaid 55 & over, not the low income under 55 for recovery. Section 8 requires documentation and renewals done and the windfall $ from condo sale will pop up. The ? to me is IF it is better for her to stay low-income at need as the benefits she gets between Section 8, SNAP, Medicaid for her and CHIP for your grandson is more valuable than more $ that is a 1 time event. Often single parents making low wages with kids will opt out of getting a raise as it take them over the limits for assistance as the raise still isn't enough to get them out of being "poor" but removes them for getting assistance. It costs them to make more income. This is kinda a very real problem for many low income families. Its especially true if you live in an area where rent is super expensive. In my city - New Orleans - rent in the more desirable areas is very very high and there is a lot of nice post-Katrina low income housing (like Harmony Oaks or The Muses are very nice); so staying poor and being able to live in one of the "income based" affordable housing projects makes sense. If you haven't really had a heart to heart talk with your daughter, try to do that and it may surprise you just how much state support she & her son is getting by being low income.
SO what to do….. My suggestion is for you to see an estate law atty who either also has an elder law practice or associate to discuss options that work for how CT Medicaid rules and probate laws currently run. What might be an option is if you are healthy and have assets/income such that you are likely not to ever need Medicaid is to do a codicil to your will in which the condo is left in a property trust to your grandson with daughter & son as the trustee's. If grandson is young, they will be trustees for a long time & could rent condo to cover its costs (unless you have a way to fund trust to start with); if trustees decide property is to be sold, they can determine how the proceeds are dealt with based on the advise of the atty & how trust written. Going to be long term relationship with your atty.
For some, being on assistance is a normal life. Kinda depends on your situation. Its not for me, but I can totally see how it can make sense, especially for single parents. Good luck with this!