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Will going on Medicaid cause spouse to lose 401 K and bank account money that is in their name?
bull dog
Posted: Saturday, August 15, 2020 4:16 PM
Joined: 4/1/2018
Posts: 100


I have heard that you are only allowed to have so much money a month for monthly income but I am not sure what happens to the spouses bank account money and 401K. I did not get real clear info on those parts from the Lawyer. I am trying to find out some info ahead of time from anyone who has gone through this.
Joe C.
Posted: Saturday, August 15, 2020 5:29 PM
Joined: 10/13/2019
Posts: 477


bull dog, How this works and how much you can protect depends on the state you reside in. I know the in MA the custodial spouse can have $124k, monthly income on some sliding scale up to $3800 a month and can maintain the primary residence they own. As I understand this it is based on a 1990s federal law that aims to provide some minimal protection for the custodial spouse, but each states sets their own rules. I would ask the lawyer to provide the rules for your state.
Joe C.
Posted: Saturday, August 15, 2020 6:17 PM
Joined: 10/13/2019
Posts: 477


bull dog, The link below will provide some additional explanation.

 https://www.elderlawanswers.com/medicaids-asset-rules-12016


McCott
Posted: Saturday, August 15, 2020 6:59 PM
Joined: 8/22/2017
Posts: 503


The non demented spouse gets to keep the house, one car and their own IRA or retirement account.  The ALZ person's IRA or retirement account has to be 'spent down' to almost nothing -- ($3,000) is the number I recall -- before being eligible for Medicaid.

Maybe you can move bank account money -- but there is a five year 'look back' on all your finances.  Need lawyer on this.

Your lawyer doesn't sound very good if they couldn't explain this basic stuff.  As Joe C said, things vary by state, but I think the above statement is fairly standard.


bull dog
Posted: Saturday, August 15, 2020 7:36 PM
Joined: 4/1/2018
Posts: 100


Thank you all so much for your comments and information. I hope I never have to get on medicaid but if I ever do. This may give me a better idea as to some of the things that may happen.
Joe C.
Posted: Saturday, August 15, 2020 7:54 PM
Joined: 10/13/2019
Posts: 477


McCott/bull dog, My understanding, but I’m not a lawyer, is that bank accounts, IRAs & 401ks are considered community property for married couples so funds can be moved from one spouses name to the others and not violate the 5 year look back rules. If the amount of savings exceeds the state allowed maximum for the community spouse then that amount must be spent down to the allowable threshold. McCott is correct the all the person applying for Medicaid can not have more than $2000 in their name.
Ed1937
Posted: Sunday, August 16, 2020 6:07 AM
Joined: 4/2/2018
Posts: 3682


My understanding is that Joe is correct.

" I did not get real clear info on those parts from the Lawyer."

Is that because the lawyer didn't have the information? Or maybe you didn't make it clear that you didn't understand what they told you? Unfortunately it falls on you to make sure they give you the answers you are paying for. I suggest you call the office again because you are not clear on this. You might talk to a paralegal, who should have answers for you, and it should not cost again.


ALH66
Posted: Sunday, August 16, 2020 11:25 AM
Joined: 9/17/2018
Posts: 80


https://www.nolo.com/legal-encyclopedia/using-annuities-medicaid-term-care-planning.html
I shall be doing this when dh is moved from geri psych to nursing home. So possibly starting process in two weeks. 

Jo C.
Posted: Sunday, August 16, 2020 12:35 PM
Joined: 12/9/2011
Posts: 11420


Hello, this is a loaded question. NONE of us are Certified Elder Law Attorneys and every single state has its specific requirements.  Even annuities can come with problem issues.

For instance, in my state, none of my retirement accounts in my name only; 401, IRAs, pension, do not count for Medicaid Long Term Care qualification criteria for my spouse; but my spouse's accounts in his name do count and must be part of the spend down.  In my state, there are concerns and requirements re annutities, so that too would be an issue I would take to a Certified Elder Law Attorney.  In other states, some of this would be different from my states..

This is a situation in which you absolutely need to contact your own attorney to obtain answers to your questions. Because you had retained and paid this attorney and since his/her information was not complete or were not clearly understood, you should be able to ask this question at no cost.

J.


Joe C.
Posted: Sunday, August 16, 2020 2:15 PM
Joined: 10/13/2019
Posts: 477


Jo C., I need to move to your state, MA is much less favorable for the community spouse.
Jo C.
Posted: Sunday, August 16, 2020 3:38 PM
Joined: 12/9/2011
Posts: 11420


Some time ago, they passed a change in the Medicaid law in our state.  When a person is admitted to a NH, (and it might also be on the Medicaid application), there is a question that asks, "Do you intend to return home?"  ALWAYS answer that, "Yes," in our state no matter the condition of the LO; even if comatose.  That way, the LOs home is not counted as an available asset for qualfication and does not have to be sold up front.  In this law change, our state is not permitted to ask for any proof or rationale for the answer and may not investigate; they must accept whatever is stated on the admissions or any other form.  That is huge.  Some other states demand proof of some sort that the person IS able to return home, etc. and if it cannot be satisfactorily provided said proof, then the home is considered an available rssource.  I thought of it as, "we would take our LO home if we could."

I do not know if all states permit the following; but in most, if an adult child has been a caregiver for two years for the Medicaid applicant while living in the applicant's home, then the adult child may continue to live in the house without difficulty for as long as they wish.  Whenever a house is sold, then Medicaid will begin the process of "recovery" for costs of care they paid for.

A good Certified Elder Law Attorney can be worth every penny to help position one as best can for planning; of course this is best done before the dire NH need. 

It is a terrible situation.  What is awful is when a person qualifies in assets for Medicaid but has just a few dollars over the top for income qualification, but not enough to pay for a NH. In many states, this income issue disqualifies a person from obtaining Medicaid. 

However, in other states, one can do a Qualifying Income Trust, which is also called a, Miller Trust.  In this, the applicant's Social Security and/or Pension  who is going to be admittted to the NH is deposited into the special Trust each month.  Then; each month, when the NH bill is received, a check is written out of the Trust to the NH and then Medicaid makes up the shortfall.   That has helped many people,but not every state has that available.

What often happens is that the community spouse becomes affected in the Medicaid isues re Long Term Care benefits and has little for her/his own needs as they age and they change.  It is a huge concern.

J..


Joe C.
Posted: Sunday, August 16, 2020 5:04 PM
Joined: 10/13/2019
Posts: 477


In MA both spouses 401K, IRAs, savings are considered community property so mush be spent down, I can maintain only maintain $128k of my retirement savings. As for the house, in MA as long as the community spouse is living in the house they do not count it as an assist for Medicare qualification so that is protected. 

Yes, a good CELA is worth every penny, but buyer beware. When I was shopping for a CELA some that I interviewed were trying to cell me a bill of goods, fortunately I have done enough research to know what worked and what did not in my state.


bull dog
Posted: Sunday, August 16, 2020 11:18 PM
Joined: 4/1/2018
Posts: 100


Thank you all so much for more really great information. That is a great idea about giving the lawyer a call.
btl1953
Posted: Monday, August 17, 2020 5:53 AM
Joined: 5/19/2020
Posts: 27


Get with a certified elder law attorney and ask them about a Medicaid approved annuity. After you have removed your spouse's name from all joint owned accounts (you will need a power of attorney from your spouse to do this) and made you the sole owner (with for example your children as beneficiaries). You can make a one time premium deposit of all of your money in to a short term Medicaid approved annuity (one account for non-retirement money and a second account for your IRA money). The term of the annuity is short (several years). At that point you as the community spouse can start to withdraw money out of the accounts and deposit it in accounts  titled in only your name. (ie. with a 3 year Medicaid annuity you will withdraw 1/36 of the amount in the annuity every month until the account is exhausted). There is a fee for the Medicaid annuity ( I believe it is between 1 and 2%). Once the money comes out of the Medicaid approved annuity it is untouchable as a Medicaid resource as far as your spouse's care.

There is one big catch. The beneficiary ( at least as in Maryland law) is the State. So if you expire before the money in your Medicaid approved annuity is exhausted the State receives what is left in the annuity. There are a few more nuances to it but this is basically it. You can also keep your Community Spouse Resource Allowance (in MD it is about $126,000).  As I said there are some contorted mechanics with the Medicaid rules but for someone like me (relatively young and should live 20+ years beyond my spouse applying for Medicaid) this is the route to go at least in my State.

You really need a Good elder law attorney ( one that is all they do). There are expenses to pay for sure but a good elder law attorney can be worth their weight in gold.

 

 

 

 

 

 

 


Marta
Posted: Monday, August 17, 2020 1:36 PM
Joined: 6/3/2013
Posts: 945


Bill:  vote for the party that is most likely to incorporate long-term care as part of Medicare.

Then you will be part of the solution.


Marta
Posted: Monday, August 17, 2020 3:06 PM
Joined: 6/3/2013
Posts: 945


In answer to your last query, yes, until we vote in law-makers who will change the system.

We may not help our loved ones who are now suffering, by taking the long-view, but I have four sons who have potentially inherited the Apo E epsilon gene from their father.  I will vote with future generations in mind.


dw743
Posted: Monday, August 17, 2020 10:06 PM
Joined: 11/13/2018
Posts: 152


We had/have long term health insurance that was taken out 15-20 years ago. When my DW was placed into MC it started paying, just about all the MC cost. ( For a year until she passed.)

I only bring this up, so those who may be young enough, could afford to take out that coverage.

I know this is not going to help those of us who are "up in age", but for those still younger, you may want to look into it. It will help you and the family if you need to be placed into a NH/MC.

I agree with the postings here, just sorry we all are here looking for this information. I wish I had an answer.

 


markus8174
Posted: Wednesday, August 19, 2020 7:27 PM
Joined: 1/25/2018
Posts: 687


Bill- I've just gone through this with getting my DW on Medicaid. In my state the community spouse keeps half of the joint assets which include both spouses 401K/IRA, cash value of any life insurance for both spouses, money in the bank that is not part of the routine up and down of running a household, and all of one car, and one residence. There is a minimum and a maximum in most states. In our state the community spouse can keep $25,728 as their asset, and the institutional spouse is entitled to an additional $2000.00. The most the community spouse can have is $126,400. If a couple have a little over $250,000 assets they could liquidate(not counting 1 house and 1 car), they would have to spend $125,000ish before either would be Medicaid eligible. They don't worry about the community spouse keeping the house because the state takes that from the estate upon the surviving spouses death. Further, you have to maintain these assets at or below that level, or your spouse can end up being kicked off Medicaid.  As for income, that varies from state to state too from what I've heard. Together we had right at $4000. coming in between us(gross). My wife has about $500.00 or so, mine with pension and Social Security is $2500.00.  When all is said and done, I had to cash out my life insurance, withdraw some of my 401k, and sell one car for my spouse to be eligible. Those assets had to be spent on documentable debts or to upgrade the existing house, buy a better car. After all that I still have to contribute $185.00/month. Hope this is what you were looking for.
Crushed
Posted: Monday, November 23, 2020 1:52 PM
Joined: 2/2/2014
Posts: 6105


dw743 wrote:

We had/have long term health insurance that was taken out 15-20 years ago. When my DW

To say you were staggeringly  lucky is an understatement

LTC insurance is incredibly more expensive today

  for the industry take on why its so much more expensive see 

 

https://www.aaltci.org/long-term-care-insurance/learning-center/long-term-care-policy-rate-increases.php/



MVChappy
Posted: Wednesday, December 23, 2020 5:32 AM
Joined: 12/11/2020
Posts: 39


My experience with the 2 Elder attorney....The questionnaire, is a tool used by them to attain your net worth..and they base their fee on that...something to keep in mind...in my case it was $7000. up front...and no guarantees. The free consolation is another tool to get you in the door and at that point the attorney main objective is to get you to sign for representation. When I said I wasn't prepared at that moment, his reply was I could put the deposit on a credit card.. Red Flag...couldn't get out of there fast enough...The attorney negotiates with medicaid and negotiations are just that....Also keep in mind Medicaid has rules, I don't think there is too much wiggle room in negotiations...there is also the option to represent yourself with Medicaid....There is no rule that a lawyer has to do it for you.....You can research options in your state on line. My state NY, recognises 'Spousal Refusal' which means Medicaid can not go after the spousal assets, in order to pay for nursing home expense....however the distinction is your spouse cannot be named on assets, such as ownership of a house, liquid bank accounts...IRA's also can not be touched, only the withdrawals....In NY there's a 5 year look back so flipping assets, might be too late in the game. In my case nursing home is not in the distant future, I'm claiming Spousal Refusal, as I qualify on the big things, and rolling the dice, on the remainder. I'm confident I can represent myself with the social worker. The key is knowledge...you need to make the effort & research the rules & options......
Crushed
Posted: Wednesday, December 23, 2020 8:04 AM
Joined: 2/2/2014
Posts: 6105


Ive said this before I am astonished that people who would not cut their own hair think they can do their own legal work.  Ive been a lawyer since 1976.  I paid attorneys do  DWs disability and to do our trusts.   I litigated her pension myself, since that was something I had experience in.

Medicaid qualification is not a "do-it-yourself" proposition unless your assets are very low.   


MVChappy
Posted: Wednesday, December 23, 2020 10:24 AM
Joined: 12/11/2020
Posts: 39


I am far from a legal expert, however I got to 70 + years by being proactive in my affairs...Like any profession its a business, this also includes the medical society, & most professional people tend to walk both sides of the streets... I concluded my properties transfers & assets to my only son through a part time retired attorney...for $500. plus county filing fees.... I should have mentioned in my previous post that the $7000. quote I received, included a "Trust". My family consist of me, my wife, my son & his family.....I explained some of the conversation I had with the Elder attorney firm to this retired lawyer....He was curious about the 'Trust" & asked if I had any knowledge regarding "Trusts", I replied no, as the expertise would come from the attorney...right ? So this forthcoming honest lawyers says, 'If you only have one son, there is no need for a "Trust" as he will be the sole heir.....This is just one example of a few.....

The medical society is no exception...Ever been hospitalized? Ever experience a parade of doctors in & out of your recovery room? not knowing who they were & where they came from...& learned of their names on your Medicare statement?  Would you trust the opinion of one doctor with a medical condition?

 I realize I'm getting off topic but my point is that of being pro active in your affairs....just sitting back & trusting a professional will do it all for you might leave you at a real disadvantage not only in your pocket book but in your situation....I agree there are situations where there is no choice in legal representation, but most questions can be answered on line utilizing the states website on the topic....  


Victoria2020
Posted: Thursday, December 24, 2020 1:26 PM
Joined: 9/21/2017
Posts: 652


I have found that free legal advise is worth every penny.

What if your son has a bad car accident and loses all his (not yours anymore) assets in a lawsuit ?

 What if he dies before you and his widow remarries. Your grandkid's new step-dad going to pay your bills?

What if he goes into a coma and your DIL pays her husband's care bills, not yours?

He's lost the step. up in value on property  ( next admin is looking   on removing step-up btw) and if large estate assume you figured any  gift tax implications.

 

With a trust, you would have stayed the owner and the successor trustee- your son or whomever if he couldn't serve would be able to step in to use your money to care for you.

 



Lynne D
Posted: Thursday, December 24, 2020 8:24 PM
Joined: 7/21/2020
Posts: 20


You will also need to understand your state’s approach to Medicaid Estate Recovery. They may lien your residence after your spouse passes.