10 Sep How can I protect IRAs from nursing home bills?

Q. Can you put Roth and traditional IRAs in an irrevocable or revocable trust? If not, is there a way to protect it from being taken by a nursing home?
— Holding on, if I can

A. You’re right to be concerned about this.

If a person has assets and ends up in a nursing home, they will have to pay for the care until they spend down assets and become eligible for Medicaid.

There are some ways to protect certain assets, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

She said you cannot put a traditional or a Roth IRA in a trust while the owner of account is living.

However, a trust can be designated as a beneficiary of IRAs, she said.

“IRAs are countable assets in New Jersey for purposes of Medicaid eligibility,” she said. “It may be possible to convert a Medicaid applicant’s IRA to an annuity or to preserve a spouse’s IRA as part of the community spouse resource allowance up to a maximum of $130,380 in 2021.”

To make sure you take the right steps, be sure to consult with an elder law attorney who can advise based on your specific situation.

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This story was originally published on Sept. 10, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.