Having IRAs and other retirement assets can give us peace of mind that we have provided for our future, usually offering us great tax benefits, as well. But, when it comes to Medicaid eligibility, these retirement assets aren’t looked at the same way. Specifically in Illinois and Missouri, IRAs and other retirement assets are treated the same as other financial assets, subjecting them to asset limits and, if the planning is done at the last minute, potentially producing a large tax liability.
In this Elder Law Minute, Wes Coulson, Illinois Elder Law attorney, continues with the series What You Can and Can’t Keep with Medicaid and discusses how Illinois and Missouri treat IRAs and other retirement assets, consistent with Medicaid eligibility, and offers advice on why planning for these assets earlier vice later may give you the best options for protecting your retirement savings.
What you can and can’t keep with Medicaid: IRAs and other Retirement Assets
Transcript:
Hi, I’m Wes Coulson and this is your Elder Law Minute. Continuing our series on the Medicaid rules with regards to what assets you can and cannot keep consistent with eligibility, I’m going to talk today about IRAs and other retirement assets.
First thing I want to say is that what I’m going to say here is specific to Illinois and Missouri. This is a situation where state laws can differ on this subject. In Illinois and Missouri, IRAs and other retirement assets are treated like any other financial assets, in being subject to the, what’s now in both states, $2,000 asset limit. From a planning standpoint, that’s particularly of concern because if we are doing last minute planning for somebody, a single or widowed person particularly with a large IRA, we may first have to take that IRA and cash it in, which could result in a large tax liability before we can do anything to protect it.
So, if there’s a moral to this story, it is that IRAs and other retirement assets require special attention and the time for you to get that attention is early on, when there is more flexibility to protect them consistent with saving taxes. I guess, the good news here is that, that is something that we have a lot of experience with and can certainly help with toward getting the best result. Thanks.
For more information on Medicaid and Asset Preservation, visit these articles:
- What you can and can’t keep with Medicaid: Cars and Trucks
- What you can and can’t keep with Medicaid: Life Insurance
- What’s the Difference Between Estate Planning and Asset Preservation Planning?
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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 (877)995-6876 or Contact Us and we will get in touch as soon as possible.
