Strategies To Protect IRA From Medicaid, Nursing Homes and Taxes
ฝัง
- เผยแพร่เมื่อ 7 ธ.ค. 2019
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Many middle class retirees own IRAs and wonder whether they will be forced to deplete those IRAs if they go into a nursing home and attempt to qualify for long term care Medicaid.
Nursing home expenses cause many in America to deplete their estate, preventing them for leaving a financial legacy to their families and loved ones.
Many people transfer assets out of their name (either to their children outright or in trust) five years prior to entering a nursing home in an attempt to protect those assets for the family. But it's not so easy to transfer an IRA (Individual Retirement Account).
Many people wonder whether their traditional or Roth IRAs are "countable resources," forced to be spent on nursing home care.
While Medicaid is a federal program administered by the each different state, Lousiana's rule is clear, "Count funds in an IRA as a countable resource."
Some other states provide that if the IRA is in payout status (owner taking required minimum distributions), then the IRA is not a countable resource.
Some parents easily transfer their non-IRA assets out of their name, while realizing that if one spouse can go into a nursing home, the couple can have $126,420 ( Community Spouse Resource Allowance for 2019) in their name.
But what if the IRA values exceed this amount?
Even though most IRA owners would never consider taking more than their required minimum distributions, perhaps some should consider taking "much more than RMDs each year" in order to pay income tax at rates lower than their beneficiaries, and to move the after-tax amount out of their estate for purposes of long term care Medicaid.
Married IRA owners can also consider naming their children or other heirs (not their spouse) as their primary beneficiaries of their IRAs. Naming your spouse as your primary beneficiary of your IRA is traditional and common, but it also lumps your IRA into your spouse's IRA after you die, forcing your spouse to deplete all of it if your surviving spouse goes into a nursing home.
For prospective law firm clients who want to schedule a free 15 minute initial phone call with Paul Rabalais, go to: go.oncehub.com/Paul8
This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.
Paul Rabalais
Estate Planning Attorney
www.RabalaisEstatePlanning.com
Phone: (225) 329-2450
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Paul, thanks for all your videos. You are a rock star!! You have taken many heads out of the sand.
Thank you so much for this info. I hope to see more.
You are a God send ...thank you, I share all the vids I watch of yours!👍
Very interesting. Thank you for sharing the wisdom.
Thanks for watching BF 😎
thank you
I love ur videos. TY . What if both spouses have IRA's & 1 spouse is institutionalized? Will they require spend down of everything?
Excellent video and explanations--thank you so much.
You are welcome 😀
Also appreciate the perspective provided in drop down.
👏
Attorney Rabalais, thanks you for your insightful and informative videos. My question is if all assets have been established in a trust (greater than 5 years) such as IRA's, annuities, stocks, and primary residence, are they excluded for Medicaid? My father receives a monthly payout from his IRA due to his RMD, and Social Security. Would that be his only countable income?
through out this video when you said "trust" did you mean a revocable trust or irrevocable trust ?
Excellent question
Great video, and just learning about your channel, I am going to subscribe your channcel.
🎉👍👏😎
Hi your videos are helpful. If you want to change beneficiaries on your IRA from spouse to child does this have to be done 5 years before going into nursing home or any time before you go into a nursing home. Thanks Ken
Nursing home costs average 100-200K, plus if the person needs 1 on 1 care, which is common.
what can you say about dynasty trust and also Nevada trust
IRA cannot be put in an irrevocable trust?
Good video- When you mention medicaid will count your IRA money plus taxes it ought to be mentioned this in most cases of retirees will put you into a much higher tax bracket, same for early withdraws and that nursing home AKA -hell hole just got more expensive.
Mr Rabalais- are assets held in a irrevocable trust counted by medicaid as countable?
Tks for the vid.
I'm pretty sure they are not.
The whole context of this video is that one should not have spend his/her own money for healthcare. But rather have the rest of us pay for it through taxes to fund Medicaid.
Isn’t the purpose of retirement savings to pay for one’s needs later in life?
So we have to pay for all those families crossing the border. Also, people who never saved a dime! Sniffy Joe Brandon broke the system can't fight it protect yourself & family.
@@HB-yq8gy You're taking my taxpayers money.
@johnloberg8372 how much did you pay in taxes last year?
I’m surprised so few watched this video.
how about Annuity?
Your presentations and explanation are brilliant, Mr. Rabalais. However, you look tired and it upsets me. Please take sufficient time to get a rest. thanks for everything you do for us.
When Mom died at 99 last year in a nursing home in Illinois, her checking accounts, savings accounts, and CDs had my sister and me as PODs or co-owners. We were beneficiaries on her life insurance. The banks and insurance companies gave us the money. If she had Medicaid care, would Medicaid have been able to take that money?
My husband and I have minimum distributions on our IRAs with us spouses as primary beneficiaries and our only child as secondary beneficiary. Would Medicaid be able to claim the IRAs for repayment?
Medicaid probably wouldn't have accepted her with those assets to start with.
But if son inherits the IRA he will have to do something with it in 10 years and he will have to pay at his higher tax rate?
Great information. How about a whole life insurance with accumulated cash value? Will the cash value be owed to the nursing home after your death?
You probably couldn't get Medicaid with that.
Middle class always looses
The strategy is purchase long term care insurance the day you turn 60. Then you don’t have as much of this to worry about.
Can they take it out of a Prudential insurance IRA,
Can you hide your personal information from a nursing home so they can't go after your assets? I mean if I was an old person being forced into a nursing home I'd just refuse to tell them anything. My name SSN I wouldn't tell them anything. How they gonna find out?
Is anyone really this naive? They have their ways of finding out...& they are pretty good at it.
And you would probably get sued by the nursing home.
Thanks, if u spend the money on vacations or diamond rings can they count it against the look back penalty?
So how did you do in the race? ;)
Unfortunately, dropped out after 33 miles. Good experience though.
Educated informative comments please
A trust is not worth the paper it's Wrote on you lose everything witha trust I mean everything
Can you elaborate?
My 401 is there for both my spouse as wdl, as me. If they attempt to take this money they are taking my wifes retirement money. I will not allow that to happen.
Why not transfer the 40,000 into adults kids hands now, rather into a trust so u transfer later! No trust, no work , no problem!
Or just spend the 40k now on a long cruise , no money left for gov to take and u enjoy your savings IRA now !
that’s the culture here…solution take ur money out to another country
The reason you save your entire working life is to be able to provide for your own needs during retirement. I get frustrated at the concept of "protecting your assets from nursing homes" because it essentially transfers personal responsibility from the individual to the taxpayer. Call that what it is: LEGALIZED WELFARE FRAUD AND THEFT. Where does this rationalism come from in otherwise decent people?
100% Accurate. Paul Rabalais gives advice how to allow caregivers, late in life spouses and others to commit Financial Elder Abuse
Yeah, because our government and hospitals care sooo much about us.😂
@@Brynarlo OK. But why should they? What makes you so special?
@donadams021355 how much did you pay in taxes last year?
You pay taxes to Medicare
Duh
When have you heard the rich loosing money to medicare
Duh
This is totally ridiculous advice simply take the money by precious metals or precious desirable consumer items, drugs guns collectibles give them to your children to sell at a later date and F the retirement home
so govt want to keep u poor