The Listen to Lawrence Letter: Can Medicaid attach a lien on my retirement accounts?

Dear Clients and Friends,

There are a lot of assets that you’d like to protect and obviously, the family home is at the top of the list. But right underneath that seems to be your retirement accounts. Let me put this important concern to rest by clearly answering this next question.

CLIENT QUESTION:

You created an irrevocable trust for me several years ago.  My question is after my death can Medicaid attach a lien on my retirement accounts?

MY RESPONSE:

In a previous installment of my LISTEN TO LAWRENCE LETTER, I made clear that Medicaid cannot recoup what they paid from your Medicaid trust. However, this is a different question, because your retirement accounts are never placed into your Medicaid trust. Instead, your retirement accounts stay in your name while naming beneficiaries.

Why do they stay in your name? Two reasons. One, transferring a retirement account to a trust would trigger the income tax on all monies within the account. OUCH! Second, we don’t have to worry about putting a retirement account in a trust because retirement accounts are generally exempt as an asset from Medicaid (which I have explained in several previous letters).

So, at your death, can Medicaid go after the death benefit of your retirement accounts that remained in your name?

Assuming that you did not name your estate as the beneficiary, the answer is NO! PHEW!

I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.

And, if anyone you know would like to receive this

Listen to Lawrence Letter, just have them email me at

info@davidowlaw.com and I’ll add them to the list!

As always, please send me your questions. If you are thinking about it, others are probably too, so my answers will no doubt help you and many others.

Let’s stay connected.

Stay safe!