In many cases, when you approach retirement and have retirement accounts, you may have a choice between receiving a lump sum payment or a stream of income from your pension or retirement account. It may sound better to have an ongoing stream of income, but sometimes it isn’t.
If you wind up needing long-term nursing home care, Medicaid will require you to use any available income you have to help pay for your care. If you take a lump sum payment, and you are able to transfer that money to another person or into a protective trust five or more years before you need nursing home care (thus avoiding the “look back” period), the entire lump sum payment will be protected and you may become eligible for Medicaid home care. Even if you need nursing home care within five years, you may still be able to save a large portion of the money (see Strategy No. 14).
Once you have transferred your money to another person or to a trust, the money is no longer legally yours, and you will be eligible for Medicaid to cover your care. Often, taking that lump sum payment is the best way to protect the most money. However, every person’s situation is different, and you shouldn’t make these important decisions alone. A qualified Elder Law attorney can help you examine all the elements to take into account in deciding how to protect your assets and income when you need long-term care.
Lamson & Cutner has a team of experienced Elder Law attorneys and paralegals who are committed to helping our clients make the best decisions possible to protect their assets. Click here to learn more about the services we offer, or, to set up an initial consultation, you can contact us here, or call our office at: (212) 447-8690.