When applying for Medicaid, the key issue regarding a retirement plan (for example, your IRA or 401(k)) is whether or not it will be a “countable” asset for the purpose of determining Medicaid eligibility. Eligibility is based upon the amount of assets the applicant has available. To be eligible, a single Medicaid applicant generally cannot own more than $2,000 in “countable” assets. However, not all assets are considered countable. Some assets are exempt, and thus do not count towards the $2,000 limit. These exemptions include the applicant’s home, car, personal property, and pre-paid funeral and burial (so long as the pre-paid funeral and burial meet certain specific Medicaid requirements). Any stocks, bonds, mutual funds, additional real estate, and cash in banking accounts are all countable (assuming they are in the applicant’s name or the applicant is listed as a joint owner).
The question of whether retirement plan assets are considered countable varies by state. Unfortunately, in Michigan, a retirement plan is a “countable” asset. That said, there are other ways to protect retirement assets if you have a loved one in need of skilled nursing care – and that’s where an experienced elder law attorney can help you navigate the nursing home Medicaid process and, in most cases, protect a significant portion of that loved one’s life savings. What assets can be protected depends on the total asset mix – real estate, retirement plans, non-retirement plans, etc. What you should take from this is that there are many different strategies available to protect assets from the devastating costs of long-term care.
These are general guidelines to keep in mind, but for individual cases it is advisable to consult an experienced elder law attorney. Since this is a complicated area of the law with many landmines to avoid, an elder law attorney is an invaluable tool for determining Medicaid eligibility.
Glenn Matecun is one of the premier elder law attorneys in the state of Michigan. More importantly, he focuses on forming personal connections and building long-term relationships with his clients. Visit our contact page to get in touch with us and/or schedule a consultation.