Q: As part of their divorce settlement in 1966, after 20 years of marriage, my mother-in-law was awarded her husband's navy pension. He died in 1990. She is now 80 and in need of an Assisted Living Program (NY). The pension puts her income about $100 over the Medicaid limit. Are there any benefits she can claim? Her ex married twice after; she never remarried.

A: Congress and HCFA (the Federal Health Care Financing Administration) created the basic rules for Medicaid, but the states each manage their own individual programs. The basic framework is the same, but each state has it's own quirks.

Depending on the state, there are various ways to handle the problem of having too much income to qualify for Medicaid. Usually this involves setting up some form of an irrevocable income trust.

Irrevocable income trusts (Qualfied Income Trust or Miller Trust, Pooled Income Trust) allow you to assign your income to a special federally approved trust every month. There are specific rules about how the money in the trust can be used for your benefit. Because your access to the money in the trust is restricted, it is not considered to be "available" to you. It is no longer counted as available income.

Only a qualified attorney can advise you whether one of these techniques would work for your mother-in-law. There may be more appropriate legal strategies for her particular situation. A good elder law attorney will know all of the options available to her.

While no one likes to spend money unnecessarily, this is one of those times when saving a little money may cost you dearly in the long run. Get legal advice from an attorney. There are businesses advertising that they can write Qualified Income Trusts, or even sell you a fill-in-the-blank program so you can write your own. I won't get into whether they are practicing law without a license, but you are taking a grave risk if you use anyone other than an attorney who is an expert in your state's Medicaid laws. Do it wrong and you may never qualify for benefits, and you may run afoul of the law. Do it right, and your mother-in-law should have access to benefits she can't get now.

If you can't get a referral to an elder law attorney from someone you know and trust, the National Association of Elder Law Attorneys can give you a referral.

If she has few assets she may also qualify for VA Widows' Pension Benefits.