Living in TX, if my husband goes into memory care is MY 401k considered an asset for Medicaid? - AgingCare.com

Living in TX, if my husband goes into memory care is MY 401k considered an asset for Medicaid?

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Also on the “face sheet” your working on, be sure to include any info IF any of your kids could be considered special needs.

My understanding is that Medicaid allows for assets to get shifted to special needs trusts. If you all have $ left even after you SPIA, you may want to think about SNT for a child. If it’s just a little amount left, look into establishing the initial maximum ABLE account for them. TX seems to be finally rolling out ABLE and perhaps $ could go into those although smallish 14k max. But you yourself can add $ into it for them each year afterwards.

Also paying down debt debt may not be in your favor. Like if paying off a mortgage leaves you super cash poor, maybe don’t do it, especially if the mortgage has good terms and the monthly manageable. Like I’d probably never pay off our mortgage early as our interest rate is under 2%.
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Jan - since you asked.... I’d suggest you ask your CELA atty their thoughts as to whether your turning some of that 401 $ & other assets into a SPIA just for you. Normally I hate hate annuities as I view them as just so often sold by someone holding an insurance license to not so savvy elders under high commissions, but a SPIA - single premium immediate annuity- is a very special creature. For a community spouse (you!) that is likely to outlive their in a facility spouse and outlive for a good period of time, the 120k in assets allowed by Medicaid for the CS isn’t enough assets. You’ll more than likely find yourself financially insecure & without a partner or spouse to help ever again financially. If he’s 94 & your 92, then yeah 120k can work. If your a younger CS, 120k is not gonna do it. But remember your income (not assets as those are “joint”) should not be a factor for hubs eligibility for LTC Medicaid. If you can properly shift assets into income tied to just you then you’ll have $ longer yet not affect hubs medicaid. Comprende? A SPIA can do this but imo you need to have it done just right so that it’s Medicaid compliant and ok for actuarial tables and due to all this SPIA are specialty underwriting done by a few.

So say your likely to outlive hubs by 15 years, you all have $100k in savings and you have a 401k 100k and whole life insurance with 5ok cash value for each. You have 300k in assets as viewed by Medicaid. 300 -120 (its actually an exact amount which varies by state but avg is 120k) = 180k & goes in its entirety to become a SPIA that is income paid to you. You want it to be as low as possible but still actuarial ok for IRS actuarial tables. (Btw these can also get used for determining remainderman stuff for life Estate for Medicaid, I don’t even try to understand them). Must be Medicaid compliant which means actuarial ok, Medicaid as the beneficiary & in some states commission fixed.

Why “low” is due to Medicaids income rules. Say His monthly income is $2100 and yours $1500 and you still have a $1800 mo mortgage and you have higher than most RX costs that runs you $1k. COL is say $1200. But your monthly is $4k. You need $2500 more, so you get the SPIA paying you $ and ALSO file for MMNA of $ his income. So his $2100 mo income Medicaid required copay gets minus $ as it’s “waived” to go for your MMNA. It’s a real #s dance. A good CELA level of atty will have FAs they work with to do whatever changes ahead of hubs actual filing of his Medicaid application. Everything has to be done BEFORE application filed as Medicaid does a “snapshot” day to which all $ is affixed to. None of this is a diy.

Tx PNA (personal needs allowance) is $60 a mo. That is all the flexible income $ hubs will have once on LTC Medicaid.

Other stuff is change beneficiary on all life insurance. If you get hit by a bus and die and have hubs as beneficiary, it kicks him off Medicaid & who will be there to deal with all this for him then.....

Also if you both are on the younger side and possibly have parents who have you as heirs, you may want to ask they codicil thier will to have it go to a Testamentary trust. My understanding is for TX anything put into a Testamentary Trust is outside of Medicaid as it stays in probate. I’d ask atty about this if it might be a possibility.
If you would let us know how things shake out, as we all learn from each other!
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In most states, Medicaid considers married couples' assets as joint/community property. This usually applies to investments and retirement accounts in regard to the asset eligibility rules. Most states allow the community spouse to keep all income in their name, but in the case of investment income, they may count the total cash value towards the asset limit. Most states allow the community spouse to keep an additional amount of assets, and the amount may differ from state to state.
I highly recommend calling your local Aging & Disability Resource Center. If you don't know where/who is your local ADRC, you can call a state number, and they will transfer you to the ADRC closest to you. For Texas, the # to call is 855-937-2372. ADRCs are a free service, and the staff will help screen you for programs, explain the eligibility rules, and help you have a good understanding of what your options are. I agree that it would be a good idea for you to consult with an elder law attorney--your local ADRC may very likely have a list or referrals for elder law attorneys in your area.
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Medicaid does not require the community spouse (you) to themselves become impoverished. Only hubs needs to in order to be eligible for Medicaid. Joint assets come into play for his eligibility. BUT Your income not a factor for his eligibility. But how to make things work and do it so that any $ shifted is Medicaid compliant is complicated. Take guests shoppe advice and speak with an atty & before ever filing for Medicaid. I’d try to get one NAELA or CELA level.

Also TX MMNA / monthly maintenance needs allowance for the community spouse is pretty high. About $2900 a mo. So you want the attorney to look into filing for MMNA for you if at all possible.
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janpatsy1 Jul 30, 2018
Thank you, for giving me more info. Do you know of other questions that might be helpful to ask?
I am getting all our info together to bring to a CELA lawyer. They gave me a form to fill out{kids income, medical, etc} if you can think of anything else I would be very appreciative;
thank you
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Yes. Community spouse is complicated and worth consulting lawyer to protect you both.
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