The Listen to Lawrence Letter: Inheriting assets after you’ve made your plan
January 5, 2022
Dear Clients and Friends,
Inheriting assets from someone may affect your own carefully made plans, as is pointed out by this client’s question.
So I have just made an irrevocable Medicaid trust with you. Now someone has told me they want to put me on as a benefactor of a checking account – or add my name to the checking account so when they die I get the remaining money. How will this impact my trust?
You being put on someone else’s bank account has nothing to do with your trust. However, if you are the named beneficiary or the account is joint with you, then you will inherit this money upon this person’s death. When you inherit this money it will be in your name and not in the trust. As such it will be unprotected money from Medicaid. Is this a lot of money where you really care to protect it? If so, then perhaps some other arrangement should be explored, like having your children be the named beneficiaries. Alternatively, you could inherit the money and then give it away later, subject to a new Medicaid lookback period. We can also get a lot fancier and change this person’s estate plan so you inherit this money in a trust they create for you. There are many options we can explore, some more practical than others.
The bottom line is that inheriting money can interfere with the estate plan you have already created. If you know that you may be inheriting money from someone, we should figure out the best way to do it NOW so that it is consistent with your overall plan. Let’s talk.
I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.
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Until next time…
peace, health and happiness,
Lawrence Eric Davidow