My disabled mom is 60 and probably soon going to be receiving a retirement sum of around $800k from my father's 401k (who is finally completely divorcing her.) We're panicking because that will disqualify her for both her SSI and her Medicaid, as we will have to cash it out fully immediately and reinvest it (as Edison will not allow her to take payments, only a lump sum - so having the 401K disqualifies her from SSI, which means she'll need the money, but then cashing it out DQ's her from Kentucky Medicaid because the amount will be too high.) We need to find her an insurance that will cover her multiple health conditions until she is age-eligible for Medicare, or the retirement money will very quickly be gone. She wants to buy a small house and a car and then reinvest what's left. She's been told she is "uninsurable." Can any of you help us find a company that might cover her? Is there perhaps an investment account she could put it in that would allow her to take monthly distributions for living expenses but not be counted as an asset by Medicaid in KY?
Who told you she was uninsurable? I thought the ACA made that a thing of the past.
She didn't tell me what company it was...
Honestly, I need help finding an attorney for her. I am incredibly overwhelmed as it is...but i would love it if we had someone who knew the laws to take over T_T
https://kynect.ky.gov/healthcoverage/s/?language=en_US
Go to healthcare.gov.
Everyone in the US is insurable.
You will have a number of options and costs to consider.
It will take you about 3-4 minutes to get you to the prices and options.
There is no such thing now as "uninsurable". A pre-existing illness cannot be used to deny insurance coverage. With these funds it will not be a difficult thing to purchase insurance care. When the funds are gone Mom will again receive care.
The important thing now is that Mom's POA meet with an ATTORNEY. With this kind of sudden income it is not a guessing game and it is not "we hear that" and it is not the opinions of Forum members from all around the world. Your mother now needs EXPERT ADVISE FROM AN EXPERT. See a good Elder Law Attorney at once.
Yes Mom will lose her Medicaid and SSI. She will have 800k! If she watches her spending that should last her a long time.
Honestly, I'd love to have a professional handling this. We are terrified and I am incredibly stressed. But I did find out that KY Medicaid does not count IRA's, so that's a possibility. I think I need help finding someone who knows about KY law and Medicaid and all that...
What are her "multiple health conditions"?
Who told her she was uninsurable? Was it a private health insurance broker?
If she will be receiving $800K, she will have enough money to buy some sort of health insurance, even if it's just catastrophic coverage. She will have enough money to live on, regardless if she loses her SSI and Medicaid. Since it's a 401k there may be some penalty for starting withdrawals early, but I'm not a CPA or financial planner so cannot say for sure, I just know that's how it is with mine. Money she withdraws and begins to use will most likely create an income tax exposure, so this is why you need to work with a CPA. You should also work with a financial and/or estate planner at this point.
I'm 65 and married but I don't think I'd ever want to buy a house at 60 (and single) and have to deal with the maintenance, repairs, taxes, insurances, etc. especially if you are the one who would be orbiting around her if/when she can no longer do it herself. It's also very expensive to hire out the work right now. She needs wise guidance from experienced professionals to help her have the best future possible. The effort to find them and the cost of consulting will be worth it. You aren't going to find anyone worth a darn to do it for you or for free.
Healthcare, once Mom receives this money she will be able to afford the best policy. There are brokers who will come to your home and explain different policies. Office of Aging can help too.
My suggestion is to speak with 2 or maybe 3 CELA level of estate & elder way attorneys in your State and pick the one your mom and you or whomever is her POA gel best with. Perhaps speak with your mom’s divorce attorney for a suggestion (not again NOT your dad’s divorce lawyer).
and be careful on what you post on line or say to others, as you will be approached by less than scrupulous folks. That’s a life changing amount of $.
As part of a divorce, this question of how she would get health insurance coverage SHOULD BE PART of the divorce finance settlement. If she is NOW covered under his in insurance (?), then the cost of coverage for 5 years -- 60 to 65 -- should be part of the divorce financial negotiations!
Then get with a tax/wills, trust and estate attorney, elder care attorney ASAP! The divorce attorney in theory should be able to advise on this too. If your mom takes a lump sum from his 401K that is "taxable income to her" and both state and federal taxes will need to be paid out of that. There may be ways to INSTEAD shift these funds to a "special needs trust" for her, for her care which may be a way to "shelter" these funds from taxes if she meets some of the legal definitions of "disabled."
Does she now receive SSI disability payments? Again, the right lawyers may be able to help get her qualified for Social Security Income disability payments AND PERHAPS Medicaid/Medicare disability coverage depending on what here specific disability is. For example, folks with End State Renal Disease can qualify for Medicare BEFORE age 65. That is to say, if legally disabled she may be eligible for one or more "federal" or "federal/state" health insurance program.
All to say YOU NEED TO GET THE RIGHT LEGAL HELP NOW.
Believer your mom is in Kentucky?
contact your bar association, look up tool here
https://www.kybar.org/search/custom.asp?id=2947
Or KY legal aid
https://www.klaid.org/
If your mom has been diagnosed with a dementia, she is eligible for Social Security Disability and Medicare. I went through this with my husband who was diagnosed with Dementia at age 54.
He did not have a high enough work score to be eligible so the SSA rejected the application. Then I contacted the Alzheimer’s Association and they told me about a Compassionate Allowance application. There is actually an exception for Dementia related diseases. I applied and he was approved. He gets SS Disability pay and Medicare.
When you apply, it’s crucial that you make clear the date she was diagnosed. Have a doctor write that up. She won’t be eligible for Medicare until 25 months after she’s deemed “disabled”. Her doctor needs to run that date back as far as possible. She can receive the disability pay immediately. She will likely need a Representative Payee for her disability check and the bank can set that up.
Here is the link to the compassionate allowance info.
https://www.ssa.gov/compassionateallowances/
Accepting that she is documented to be Disabled, an astute Elder Law Attorney could perhaps construct a "Special Needs Trust" for your mother, into which the $800,000 might directly flow. The Trust would have a Trustee (perhaps you?) who would apportion out the expenses for living: rent, bills, food, all of which must be documented. A special Account at the Bank would be set up, and checks drawn from that account. DO THIS FIRST: Best Elder Law attorney in Kentucky or nearby Ohio to give you sterling advice. The $800, 000 should not flow directly to your mother personally. Two other points: You are falling prey to bad advice: 'Mom is not insurable" Completely erroneous statement under the Affordable Care Act, but the cost of her insurance will be based upon "income" (Here's where you need that terrific attorney again) One more not so great idea you shared: Mom wanting to buy a small home. That will surely complicate many things for whoever is Mom's Trustee: A very nice Independent Living Apartment for the 55+ years of age is much more feasible, and lacks all the "bills, taxes, yard work, insurance claims for the roof that had hail damage, etc" Just don't "go there". A beautiful apartment (mostly All Bill Paid, except for perhaps electricity and phone) is a much better idea. BUT FIRST: The astute Attorney needs to be supporting you at every step of the way, and he/she will be a lifesaver for you. Concern # 1 is how to set up a Trust into which money flows.
If you’re looking for an elder care lawyer in Kentucky, a great resource to start with is the Eldercare Locator. This is a national service provided by the U.S. Administration on Aging, and it can connect you with eldercare resources, including specialized lawyers, in any state—including Kentucky.
You can reach Eldercare Locator at (800) 677-1116. Just give them a call, and they should be able to guide you to the right local resources and professionals who can assist with elder care issues.
If your mother has a retirement account, however small, call her financial adviser or any other financial adviser to see if the money could be directly transferred to her retirement account. There are rules particular to divorce, and maybe you’ve checked this already, but if not, worth a few phone calls. Spouse’s retirement funds should be able to go to other spouse’s retirement.
Re income - If your parents were married more than ten years (likely), she will STILL be entitled from Soc Sec income based on his earning history even after the divorce.
BUT many moving pieces here — get professional help!
1. She should be able to roll a portion of the 401(k) funds into her own retirement plan. Although SSI will not count her retirement funds as a “resource,” they WILL count any funds pulled as income against her SSI (the first $20 in income per month is waived).
2. SSI does not count a home that she lives in as a resource. They do not count 1 car (even if she doesn’t drive, it is waived if she says that the car is driven in part to take her to doctors, get groceries, etc), household and personal items are not counted, and set-aside burial funds are not counted.
3. Perhaps set up an additional trust that will pay for specific SSI exempt items. This type of trust is state-specific, so you NEED an elder care attorney to set it up. The funds in the trust do not count as a resource for SSI. You need someone who is not your mother to be the trustee. The trust is set up to pay for any household or personal items, for car repairs or for a new car (have to immediately get rid of old car-you are only allowed 1 car), any medical expenses not covered by insurance. I am providing general guidelines, but these types of trusts have state-specific rules and guidelines.