In this Elder Law Minute, Wes Coulson, Illinois and Missouri Elder Law attorney, discusses whether IRAs and other retirement assets are taken into consideration in determining whether somebody meets the asset limit for VA benefits or Medicaid eligibility.
Do IRAs and Other Retirement Assets Count in Determining VA and Medicaid Eligibility?
Transcript:
Hi, I’m Wes Coulson and this is your Elder Law Minute. Today I want to address what’s a fairly common question we get and in the process maybe clear up a pretty common misconception. The question is whether IRAs and other retirement assets are taken into consideration in determining whether somebody meets the asset limit for VA benefits or Medicaid eligibility.
Because IRA assets are excluded in some other contexts, and by the way in some states other than Illinois or Missouri, people think that they’re not considered. Well, they are very much considered. Moreover if you’re married, it’s not just the IRA or other retirement account of the person who needs care that’s considered, but that of the other spouse as well.
So, here’s the thing, if you have IRAs or other retirement assets, they need special attention in the context of long-term care. Because trust me, if you go into a nursing home and you want to get on Medicaid and you have a $250,000 IRA, only two things that can be done. Either use it all up to pay for the nursing home, I call it the 100 percent tax, or get it out of your name. And getting it out of your name means taking the money out of the IRA, and let me assure you, you don’t want to have and extra $250,000 in taxable income in one calendar year because that puts you up in a real high tax bracket.
So, yes they count and yes the key on planning is to take them into consideration and address them early on in the process. Thanks.
For more information about Asset Preservation Planning, visit these articles:
- IRAs and Asset Preservation Planning
- What You Can and Can’t Keep With Medicaid: IRAs and Other Retirement Assets
- What’s the Difference Between Estate Planning and Asset Preservation Planning?
“Your Trusted Advisor on the Elder Care Journey”
Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 or (314) 567-9292, or Contact Us and we will get in touch as soon as possible.
