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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?

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Lyashi, I am not answering your original question here, but I can't find another place to reply to your statements about getting an attorney. Specifically, you're worried about paying for an attorney. It should be your mother who pays, not you, and if you are getting help in planning her entire financial status, it's not going to be a one-time meeting with an attorney. While my ability to pay was not in question, with possibly one exception, I've not paid an attorney in advance for working on this kind of project. She may be billed intermittently or at the end of the project. If you can show definitively that your mother will be receiving $800,000 fairly soon, you should be able to find an attorney who will not require payment in advance.
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Reply to Igloocar
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AS several others have said, with the Affordable Care Act, you can get insurance regardless of your health. Prior to the Affordable Care Act, most states had what were called "high-risk pools" that were for people who were otherwise uninsurable. Ir certainly wasn't a perfect solution, and the pool in some states wasn't large enough for everyone who needed it. At one point, I thought that might be what I was going to need to use it, and I believe I was living in Kentucky at that time; luckily I didn't. It's possible high-risk pools still exist, but your mother should not need one. And as others have said, if she gets Social Security Disability, after a year she would get Medicare regardless of her age, which happened to me. I am thinking (not my business!) that perhaps she never worked under Social Security and thus is not eligible for Social Security Disability. Otherwise, she should apply.
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You can't afford NOT to consult an attorney.
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Reply to CalGal43
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It sounds like you need a multi-faceted plan that you set up with an elder-care attorney.
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.
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Reply to SSAretired
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Agree w above - elder care / divorce atty imperative at this point.

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!
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Reply to NeedHelpwMIL
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Don't panic! This actually sounds like a good problem to have! Mom is going from low income and Medicaid-eligible to receiving an $800K windfall and being able to choose her own healthcare plan under the Affordable Care Act. As others have noted, she can enroll at healthcare.gov and will not be refused coverage. She only needs ACA coverage for the next five years until her Medicare coverage kicks in. Also, she will probably be eligible for at least some sort of Social Security benefit within next couple of years. If she hasn't worked, she has claim to her ex-spouses benefit and it won't impact him at all. You need a financial advisor who is a fiduciary to advise you and help with the investment account, but from what you are saying, Mom is not in a bad place at all!
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elcee499 Sep 8, 2024
Replying to my own comment to ask if Mom has a lawyer representing her in the divorce. In many states, you need a document called a Qualified Domestic Relations Order (QDRO) to be filed with the court and the 401k plan in order to distribute her share of the 401k or pension plan. I'd be more concerned a having a competent divorce attorney than anything else at this point.
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Obama care orACA requires insurance companies to provide healthcare. Go to healthcare.gov to sign up
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Reply to Sample
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In addition to legal counsel:
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.
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Iyashi,

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.
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Reply to HaveYourBack
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Affordable Care Act or Short Term Major Medical plans? Medicaid, if your mom qualifies.
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Reply to Onlychild2024
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You need a qualified estate attorney or tax attorney - full stop. Stop telling us about the roaches and start calling to find one who will work on a contingency. She will be getting this settlement so she should be able to pay the costs. Many attorneys work this way. There may be an appropriate trust that could be set up to accept the money and not mess up her benefits. Unless you educate yourself to the point you have a quick law degree, you simply cannot negotiate this without expert advice.
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fluffy1966 Sep 8, 2024
Well-said. Forgo all other concerns and immediately seek highly informed legal advice from specialized Elder Law/Special Needs Trust/Social Sec. Disability attorney. You are likely to make a misstep without this, and the misstep will have far reaching ramifications. You have already been given bad information, "Mom is not insurable" You must immediately have the best of highly informed Legal advice from an attorney who is a specialist in Trusts, and who will work on a contingency. Go no farther without legal assistance, and go for "the best" legal assistance.
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Now is the time to find the very best Elder Law attorney who also has expertise in Special Needs Trusts/SSA. The time is NOW to seek consult before the distribution of $800,000. Clarification of the word "disabled" would help, but she has already qualified under Social Security's dual conditions of medically documented disability + low income eligibility.
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.
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Reply to fluffy1966
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Sorry to hear that you are going through this. It’s not easy.

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/
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Igloocar Sep 13, 2024
I may have missed something, But while the OP reported that her mother has multiple disabilities, I don't believe Alzheimer's was mentioned. Given her mother's age--some years under 65--Alzheime's does not seem likely unless it is early-onset. Since her mother is talking about buying a house and investing, it also doesn't sound like she has Alzheimer's. I understand your husband was diagnosed at age 54, but the information we've been given doesn't suggest dementia in this case (again, assuming I haven't missed this),
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The Affordable Care Act (Obamacare) is the answer. This is what it was designed for - people who have preexisting conditions who are shut out of getting their own private health insurance. When my husband found himself uninsurable years ago, we were dumbfounded. It was before Obamacare, and like your mom, he still had 5 years to go before he was 65. When Obamacare was passed, we said, “Thank God.” Go on the website and apply. Forget Medicaid right now. Her assets must be below a certain threshold to qualify, and $800k is rightfully too much.
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Reply to Cminor
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Sorry you are dealing with this. FIRST YOU NEED qualified legal advice on several fronts!

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/
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Reply to Sohenc
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Brandee is correct. Obamacare is not aimed at only lower-income folks. Since this is a "life situation changing" event, your mom may be insurable with her pre-existing conditions, as long as she gets the insurance within a certain time period from the situation change. Insurable does not mean it is free, BTW, but your mom will be able to get coverage.
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Reply to ItsComplex
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Obamacare is aimed at anyone without insurance regardless of income and assets. They will ask your zip code and income when you apply. If you are lower income you get subsidies. In my state if you earn over $40,000 you don't get subsidies. I had a choice of around 12 plans at various costs. Spend about 4 minutes online to get costs of the plans for your zipcode and income.
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Full stop….. 800K is way waaaaaay to much $$$$ to ever consider DIY any of this. And actually I’d be concerned about mom being fleeced by so called financial advisors who actually are more insurance agents who will want that very serious amount of $$$$ put into annuities (breath taking commission for them on this much $).

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 $.
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fluffy1966 Sep 15, 2024
Well-said, and full of "good caution". Go to the UK Law School for suggestions of the Best Elder and Senior Law specialists in your State. This has to be STEP 1. Anything you do must be done with support of very astute legal advice, or you risk a "misstep" that could have such serious financial consequences.
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Answering your question to me. Since there is 800k involved, I think a Lawyer would take on the case and get payment later. You won't know until you consult with one. Consultations are sometimes free. You do not want to handle this on your own. Mom should save every cent she can. If she allows that 800k to just go into a bank acct, she will probably be paying 50% of it in taxes. You need a professional to help you.

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.
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Reply to JoAnn29
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Iyashi, unless you provide answers to questions we've asked, we're limited as to how much we can help you.

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.
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Reply to Geaton777
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Who has handled mom's taxes in the past? Does she have an accountant? That's the first place I would start; any accountant should be well versed in how to handle the transfer of this money with the least tax implications for mom. He or she might also be able to help you navigate the health care issue, or at least give you an idea about where to start looking.
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Geaton777 Sep 3, 2024
Notgoodenough, in my personal and business experience an accountant is not someone is who wants to (or is qualified to) help anyone find healthcare insurance issue. The OP needs to go to KY's marketplace sign-up website and seek answers there, or join Nextdoor.com and ask her local community who will probably have actual useful input.
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There maybe a way to transfer Moms portion so she is not penalized. Maybe set her up with her own 401k and transferring from one to the other. When the company I worked for did away with pensions, it bought me out. I did not cash that check. My finance guy rolled it into an IRA. She is going to have a big tax debt. You need to talk to an Estate Lawyer, I guess it would be? Do not do this on your own.

Yes Mom will lose her Medicaid and SSI. She will have 800k! If she watches her spending that should last her a long time.
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Reply to JoAnn29
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Iyashi Sep 3, 2024
Unfortunately, right now we can't even afford to get an exterminator for the roaches. If you know someone who would take the case on the promise of getting paid, I'd like to hear about it.

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...
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You are talking about close to a MILLION DOLLARS at risk here, and about your Mom's Medical Care.

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.
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Iyashi Sep 3, 2024
Unfortunately, right now we can't even afford to get an exterminator for the roaches. If you know someone who knows about all this and would take the case on the promise of getting paid, let me know.
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When you go to healthcare.gov you put in her zip code and her income.

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.
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Reply to brandee
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Obamacare. The affordable healthcare act.

Go to healthcare.gov.

Everyone in the US is insurable.
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Iyashi Sep 3, 2024
I did, but it's aimed toward lower income, not this...at least from what i can tell...
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Apply here when it is open enrollment time:

https://kynect.ky.gov/healthcoverage/s/?language=en_US
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Iyashi Sep 3, 2024
We're already signed up with them for everything we qualified for. Do they have anything for people who don't asset qualify for aid?
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I would check with Marketplace insurance, as they will charge your mom based on what her monthly and total year earnings are and not what she has invested or has in savings. And I believe that the max yearly income to qualify(according to Google)is $58,320.
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Iyashi Sep 3, 2024
I feel like getting 800k in a year would disqualify her for the first year?
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You need a highly qualified Elder Law attorney.

Who told you she was uninsurable? I thought the ACA made that a thing of the past.
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Iyashi Sep 3, 2024
Unfortunately, right now we can't even afford to get an exterminator for the roaches. If you know someone who would take the case on the promise of getting paid, I'd like to hear about it.

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
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