In this Elder Law Minute, Wes Coulson discusses the various ways to handle IRAs and other retirement assets to get the most out of your money.
Hi! I’m Wes Coulson from Dent-Coulson Elder Law, proudly serving clients throughout the St. Louis metropolitan area and beyond. I’d like to welcome you to our Elder Law and Estate Planning Minute. We do these to help educate people, give them some little tips, and especially to let them know the questions they need to ask, things that they’ve maybe not thought of. Our thought on that is that we can help you best if you realize the things that you need help and that we can help you with. So I hope you enjoy. Thanks!
I had a client come in a few weeks ago who started the discussion by saying “Thank goodness I’m here, because the attorney that I talked to before gave us some really bad advice and said that IRA’s and other retirement assets didn’t have to be spent down, didn’t count, in determining eligibility for Medicaid”. Well, let me tell you, if you are in Illinois or Missouri that could not be further from the truth. In fact, those assets do coun; and that fact actually raises, in many cases, one of our biggest planning challenges, and also is a great advertisement for doing planning in advance.
Because let’s say that we have someone come in and they have a few other assets and $150,000 IRA that we are trying to protect as much of as possible. Well, given a 2,000 in Illinois and a little over 5,000 in Missouri Medicaid asset limit, they’re not going to be able to keep that. And, so, they’re either going to spend it paying for the nursing home, we call that the hundred percent tax, or get it out of their name. Well, what happens if you pull out $150,000 out of an IRA all at once? Well, the answer is the IRS really loves you because you’re paying tax on a lot of that money at a higher rate than you would have otherwise.
So, we find creative ways to deal with IRA’s as part of Medicaid planning. There are things that we can do, whether it’s a single person, or whether it’s a married couple; and in the latter case, even if it’s the person who is going into the nursing home who has the IRA, we can figure out a way to turn that into income for the spouse who isn’t in the nursing home without cashing it in.
Lots of neat stuff that we can do, but also lots of neat stuff that we have to do with that type of asset. Thanks!
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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 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.