by judithrae.brown » Mon Jul 18, 2011 05:54 pm
My 67 year old husband has Lewy Body dementia and has been in a dementia care home since April. I have filed for V.A. and Medicaid benefits to help us. We have SS benefits and small pension benefits plus each have about $60K in IRA's Does my husbands IRA's count toward his Kansas Medicaid spend down? If I annuitize them into an income stream using a J&S 100% option will the IRA's count and could we be penalized because they are not based on his life only?
Posted: Mon Jul 18, 2011 09:37 pm Post Subject:
You cannot be forced to distribute your husband's IRA under age 70-1/2. It will only be counted toward the Medicaid share of cost spenddown test as he is receiving distributions from it. It will count as part of his monthly income, subject to the $35 allowance.
The problem you may have is that he is the account owner, and you cannot make the decision to annuitize for him (unless you have power of attorney over his accounts).
As the beneficiary, you will receive the proceeds following his death. As his spouse, you can count his IRA assets as yours and they are not subject to the five year distribution rule. If he is still alive at age 70-1/2, then Required Minimum Distributions will have to be taken at that time, and can affect Medicaid eligibility under the share of cost formula.
Talk to a financial/tax adviser about your situation. Annuitization at this time may be the wrong decision for you.
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