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IMQ Strategy #5: Save the 401(k) funds when entering a nursing home

January 26, 2022 5:13 pm Published by Leave your thoughts

Most estate planning attorneys have probably faced this problem:

George is sick and needs to go into a nursing home. George has a large 401(k) in his name, larger than the $120,000 combined asset threshold. How can you have George qualify for Medicaid and still leave his wife supported?

Would this problem be solved if the funds from the 401(k) could be put in the wife’s name and then converted into a Medicaid friendly annuity which then becomes a stream of income which is not considered in Medicaid qualification?

An In Marriage QDRO allows George to donate the 401(k) to his healthy spouse. In most states, there is no limitation or look back provision for donations to a spouse. In connection with a partial property settlement or donation, an IMQ can transfer all or some of George’s 401(k) to his healthy spouse. His spouse can then convert the funds into an annuity.

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This post was written by Marcus Foote

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