the IRAs upon either of their deaths. Should he be taking IRA distributions & if so how much to avoid medicaid reimbursement?
When your mother dies, Medicaid can seek reimbursement from her estate for benefits paid when she was 55 or older. It can recover benefits paid within 10 years of her death. If your father survives her, Medicaid cannot lien her estate until he dies. If he survives more than 10 years and did not receive Medicaid, Medicaid’s claim would not be viable.
Because Medicaid treats home care programs as a nursing home program, your father is entitled to a community spouse resource allowance (CSRA). Medicaid agencies commonly sue surviving community spouses if that spouse signed a spousal refusal and had assets that exceeded the CSRA when the Medicaid application was approved.
New York’s Department of Health has taken the position that a community spouse can transfer assets after the month that the ill spouse has begun to receive benefits. Thus, your father can engage in his own elder law planning. With regard to his IRA; his age, plan beneficiaries, plan type (i.e., Roth, traditional), and tax issues should be considered. Your father should consult with an elder law attorney and accountant to discuss these matters in greater depth.
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You need to review the documents and accounts with an elder law attorney.
In New York, after a medicaid recipient dies, medicaid can recover only from the probate estate. If there are beneficiary designations on assets, then there is nothing to probate.
Medicaid can also sue for contribution from your father if his income and resources exceed a certain amount. This is notwithstanding the spousal refusal.
If your dad is over 70 1/2, he should be getting required minimum distributions from his ira.
Speak to an attorney.
IRAs that are in payout are exempt, but the income distributions count towards Medicaid's income limits. Upon death, an IRA will go to whomever is named as beneficiary. If no one is named as beneficiary, then it will pay to your father's estate, and in doing so, could disrupt your mother's benefits or be subject to estate recovery by Medicaid or Public Assistance.
How he takes distributions depends on his age. If he is under 59.5 years old and if he is under 70.5 years old, there are different rules and calculations, as well as tax consequences that can be different from Medicaid consequences. Consult an elder law/benefit attorney.
I am admitted to practice in New York. This is legal information, not advice.
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