Medicaid Qualification with Pension and RMD from IRA
This link helped tremendously: https://irahelp.com/forum-post/16259-401kira-and-medicaid
But my friends need more help and I don’t know where to point them.
1. Common law marriage, living in TX.
2. They have kept their finances separate.
3. The 75-year-old needs 24/7 care and is attempting to apply for Medicaid.
3. Monthly income approx $1,600 monthly ($1,000 SS, $400 from combination of a pension and an RMD from a Traditional IRA). The IRA has approx $20K.
4. There is old credit card debt, along with new medical bills.
5. Your post (linked above) makes it clear that the Traditional IRA needs to be spent down before the Medicaid application can be accepted. Which bills to pay 1st? Oldest first?
What do you recommend as a starting point for counsel?
Thank you!
Permalink Submitted by Steve Hagedorn on Tue, 2017-03-14 20:10
There is a five year look back when applying for medicaid so be prepared to produce all the financial statements over that time frame. Keep in mind that when accounts were closed there needs to be details as to where these proceeds went. If you haven’t already prepaid funeral expenses look into spending a portion of the $20K on these expenses (state will have guidelines as to how much qualifies). If your client is going to age in place (at home) money can be spent on accomondations made to the home. Modifications such as ramps, doorway widening, bathroom safety and access improvements and many other improvements will be looked at as appropiate use of this final “spend down”.Also, there are many resource available to help pay for the cost of aging in place. Do some research. For example here is one website that helps guide you towards some of these resources: https://www.payingforseniorcare.com/paid-caregiver/program-locator.html
Permalink Submitted by Ron Smith on Tue, 2017-03-14 22:41
Steve,I had heard about the 5-year lookback for gifts and transfers, but did not recall that the lookback included all finances. Great suggestion about prepaying burial costs.Thank you for the link. Very helpful. Much appreciated!