Ask the Expert: The estate must pay Mom's bill

My father died in April, leaving my mother as his IRA beneficiary. She was then in a nursing home with Alzheimer's, and we had a Medicaid application pending for her. She died in July, owing the nursing home $50,000. The Medicaid application hasn't yet been approved. My sister and I have inherited the IRA. Can Medicaid claim it? I've been told Medicaid is entitled to one-third of this money or $50,000, whichever is greater. I also owned a small joint account with my dad. Can my mother's nursing home take that account? Am I legally responsible for her bill?

You aren't legally responsible for your late mother's bill. Her estate is. Unfortunately, her estate includes the IRA. It may even include the joint account you owned with your father, which you inherited as the surviving joint owner when he died.

The reason is that under New York law, your mother, as your father's surviving spouse, was entitled to inherit one-third of his assets or $50,000, whichever is greater. That's what her creditors can claim from her estate. (This spousal entitlement, which is called "the right of election," overrides anything in a decedent's will. It can, however, be waived in a prenuptial or postnuptial agreement.)

If the IRA your mother inherited from your dad isn't big enough to cover her one-third entitlement, her estate -- and therefore her creditors -- can claim the shortfall from the joint account that he owned with you, says Bernard A. Krooks, a Manhattan elder-law attorney.

If Medicaid pays your mother's nursing home bill, it can claim the payment from her estate. But her inheritance from your dad may disqualify her for Medicaid, Krooks says. If so, the nursing home bill must be paid by the estate.

The bottom line. A decedent's estate is responsible for her bills.

Websites with more information
Click here to read an article on prenuptial agreements and the right of election at newyorkestateplanningnews.com.