I believe that California has different rules regarding Medicaid asset limits. In most states Medicaid still has a hard $2,000 asset limit and depending on the type of Medicaid, there is also a monthly income limit (typically 300% of max SSI amount) but what is counted as "income" by Medicaid is highly dependent on the type of Medicaid the person has. Most but not all types of Medicaid will also apply a penalty or 'deem as income' third party distributions for food and shelter but again it highly depends on the type of Medicaid and the state. DAC Medicaid has the best protections against this deeming in my experience. A Medicaid advocate or an attorney highly knowledgable in all facets of your state Medicaid law would be a good resource.(1) It became a lot easier once I started my own Social Security--my disabled adult child (DAC) daughter gained SSDI and also became Medicare eligible (after 2 years). Since her SSDI is a lot more than SSI was, she lost the SSI. This makes things a lot easier because we no longer have to worry about the monthly limits and $2000 maximum assets. In losing SSI, she did not lose Medicaid (MediCal) and all the related benefits due to the "Pass Along Rule and the Pickle Amendment." Now she has SSDI, Medicare, MediCal and regional services.
(2) I plan on making her SNT the beneficiary of her share of my traditional IRA to take advantage of her EDB status and life long stretch. If she needs the funding (eg housing), then RMDs will pay out from the trust for this at her individual tax rate, and no need to worry about needs-based eligibility programs. If RMDs are not needed, then it will accumulate in the trust at high taxes, but I will rest in my grave assured that her financial needs are pretty secure. At the end of her life, the remainder will go to charity (½) and her siblings (½)
(3) I don't plan on using my Roth IRA for the SNT so that my other children can take its advantage.
(4) She has an ABLE account at Fideltiy with about $30K which is next to a CMA account which receives her SSDI that pays for her group home. The CMA has a debit card but we are not really sure what to do with the money, but it's there and invested while we figure it out.
(5) A big part of planning for her lifelong security are related to conservatorship--that is another complicated discussion.
Statistics: Posted by startabatha — Tue Jul 09, 2024 9:56 am — Replies 11 — Views 1145