The Listen to Lawrence Letter: The benefits of planning “yesterday”

August 4, 2023
August 1, 2023 • Volume 4 Issue 160
It is time to plan…actually, yesterday was. Read on…


My husband and I are both in our early 70s. He is beginning to have memory issues. We have a retirement investment that’s in his name but I am the beneficiary. We’ve given our son Power of attorney just in case something happens to my husband or me. My question is if my husband begins to develop dementia and I have to put him in a facility, will our retirement money need to be out of his name 7 yrs prior? In order to qualify? Thank you.


First, I am sorry to hear about your husband, although you are in good company. I seem to get this type of call every day. An early diagnosis of dementia is awful news but usually gives us some time to plan appropriately. Clearly, the earlier you plan the better…and planning before you get a diagnosis is the best. Either way, most plans take five years (not seven) to accomplish.

However, there is no five-year look-back between spouses. If your husband needs a facility, his assets can be transferred to you with no penalty. You will then probably invoke “spousal refusal,” where you acknowledge that you have money but refuse to pay for his care. He will get Medicaid to pay for his care.

As to his retirement plans, however, we cannot transfer them to you without having to first pay all the income tax on the money. This may be too costly. Thankfully, you will not have to do this because in New York retirement plans are not counted as an asset, provided he is withdrawing minimum distributions using Medicaid’s (not the IRS’s) tables (which are more generous to Medicaid). These distributions, together with his other income (social security and pension), must be paid to the nursing home unless you (spouse) have an income of less than $3715 per month. If your income is less than this number, you can take from his income enough to bring your total income up to this number.

The bottom line is you have options, but you should get in here and start your planning yesterday!

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