Short Answer

In North Carolina, getting SSDI adds countable income, and receiving an inheritance can add countable assets—both can affect Medicaid eligibility. You must promptly report changes to your county Department of Social Services (DSS). Strategies like using the right type of trust for a disabled beneficiary, keeping a home as an exempt residence when allowed, and careful timing of sales or transfers can preserve coverage. After death, the State may seek Medicaid estate recovery from probate assets, subject to limits.

Understanding the Problem

You want to keep North Carolina Medicaid while starting SSDI, and a spouse on Medicaid is about to receive disability benefits. You also mentioned your spouse inherited real property. The narrow question is: how can you plan so new income and an inherited asset do not unexpectedly end Medicaid now or create avoidable estate-recovery issues later?

Apply the Law

North Carolina Medicaid evaluates two things: income (SSDI counts as unearned income) and resources (cash, investments, non-exempt real estate). A residence can be excluded in some programs if it is your home, but non‑home real property is usually a countable resource. Transfers for less than fair market value can trigger penalties for long‑term care Medicaid because of the federal look‑back period. When a Medicaid recipient dies, the State can file a claim against the recipient’s probate estate to recover certain Medicaid payments; recovery is delayed while a surviving spouse is living and does not apply when specific child protections exist. Eligibility, exemptions, and dollar limits vary by program and can change.

Key Requirements

• Report changes: Notify your county DSS promptly about new SSDI income and any inheritance so they can reassess the correct Medicaid category.
• Stay within resource rules: Keep countable assets under your program’s limit; consider whether inherited real estate is a home (potentially exempt) or non‑home property (usually countable).
• Avoid penalizing transfers: Do not give away or transfer assets for less than fair value if long‑term care Medicaid might be needed; look‑back penalties can apply.
• Use disability‑focused trusts when appropriate: For a disabled person’s own assets, a properly drafted first‑party special needs trust (often court‑approved) may preserve eligibility; a third‑party supplemental needs trust can hold family gifts or inheritances for a disabled spouse.
• Plan for estate recovery: After death, the Department of Health and Human Services (DHHS) may assert a claim against probate assets, but certain allowances and priorities apply before DHHS is paid.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-70.5 (Medicaid Estate Recovery) – DHHS may recover certain Medicaid costs from a recipient’s probate estate, with important exemptions and timing rules.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Sets claim priority in estates; DHHS Medicaid recovery is paid after higher-priority claims and allowances.
• North Carolina Gen. Stat. § 30-15 (Spouse’s year’s allowance) – Provides a spouse’s allowance that is paid before most estate claims.
• North Carolina Gen. Stat. § 30-17 (Child’s year’s allowance) – Provides a child’s allowance that is paid before most estate claims.

Analysis

Apply the Rule to the Facts: Your SSDI will be counted as income, so DSS may shift you to a different Medicaid category or coordinate with Medicare later; timely reporting helps avoid interruptions. Your spouse’s inherited real property is likely a countable resource unless it qualifies as a home under program rules; holding it unsold can affect resource limits. If either of you later needs long‑term care Medicaid, avoid below‑market transfers of that property because of the look‑back penalty. At death, DHHS can pursue estate recovery from probate assets, but spouse/child allowances and higher-priority estate expenses come first.

Process & Timing

1. Who files: You (and/or your spouse). Where: Your County Department of Social Services (North Carolina). What: Report change forms with proof of SSDI award and inheritance documents (e.g., deed, probate papers). When: Promptly after you receive the SSA decision and when the inheritance vests; local DSS typically requires fast reporting and procedures can change.
2. DSS reviews your eligibility category, resource totals, and any applicable exemptions; expect follow‑up requests for verifications within a few weeks, with timing varying by county workload.
3. If a special needs trust is appropriate, engage counsel to draft it and, if required, obtain court approval; then fund it and provide DSS with the trust and funding proof. DSS will issue a notice of any change, continuation, or termination of benefits.

Exceptions & Pitfalls

• Home vs. non‑home property: A primary residence can be excluded in some programs; inherited non‑home real estate is typically countable unless converted to a home under program rules.
• Disclaimers and quick transfers: Disclaiming or gifting an inheritance can be treated as an uncompensated transfer for long‑term care Medicaid and trigger penalties.
• Trust details matter: First‑party special needs trusts have strict eligibility and drafting requirements; mistakes can make assets countable.
• Estate recovery: DHHS recovery is delayed while a surviving spouse lives and is paid only after higher‑priority claims and allowances; personal representatives should give DHHS creditor notice during estate administration.
• Notice and verification: Failing to promptly report SSDI or an inheritance, or not supplying requested documents, can cause coverage interruptions.

Talk to a Estate Planning Attorney

If you’re navigating SSDI, Medicaid eligibility, and an inheritance in North Carolina, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at .

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.