Common Misconceptions Is My Retirement Account Protected from long Term Care in a Nursing Home
This edition of the Koldin Report E-Newsletter continues a series on common misconceptions about Elder Law, Estate Planning and Medicaid.
In this newsletter we discuss misconceptions about Retirement Accounts. All prior newsletters are saved on our website. You can read them by clicking here.
Incorrect: Retirement accounts must be cashed in and spent towards the cost of Nursing Home care before you are eligible for Medicaid.
Correct: If Retirement Accounts are in monthly “payout status” they are treated as “income” rather than life savings and do not need to be cashed in and spent before you are eligible for Medicaid.
When your Retirement Account is in monthly payout status, the Medicaid Agency will treat your Retirement Account as monthly income subject to the income contribution rules, rather than as part of your life savings.
Periodic payout status means that you are receiving regular periodic payments from your Retirement Account based on life expectancy tables. Some county Medicaid Agencies require Retirement Accounts to be paid out based on the IRS payout tables. Some county Medicaid Agencies require Retirement Accounts to be paid out based on Medicaid’s own life expectancy tables, which are much shorter. Other counties use one table for the applicant and a different table for the at-home spouse.
If you live longer than your life expectancy under the required payout table, your Retirement Account could become fully depleted by the monthly payments being contributed toward your cost of care.
If your at-home spouse is receiving a monthly Retirement Account payout, he/she may or may not be required to contribute towards your cost of care depending on the total family income.
One of the decisions that the family must make when you or your spouse is in a Nursing Home is whether to cash in either or both of your Retirement Accounts and then use other asset preservation methods which are discussed on the Koldin Law Center‘s Website which you can review by clicking here.
If your Retirement Account is put into payout status, it will be subject to the income contribution rules which are discussed on our website Click here.
The Koldin Law Center, P.C. regularly counsels its Medicaid clients on the advantages and disadvantages of each asset protection option.
When the Koldin Law Center, P.C. handles a Medicaid case, we not only handle the entire application process, but we also review asset protection options with our clients including options for protecting Retirement Accounts. We review with our clients who are already in a Nursing Home options to protect some or all of their assets beyond merely establishing Medicaid eligibility.
At the Koldin Law Center, P.C. , located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
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Remember that the Koldin Law Center offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
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