Is Money in an IRA Protected?

Jul 18, 2016

  1. Bob_The_Insurance_Guy
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    Bob_The_Insurance_Guy Guru

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    I don't work with Dual Eligibles, so therefore, I never pay attention to, nor take the certification tests for, Medicaid eligibility.

    That out of the way, I have a question.

    Met a man today, who is on Medicare, and will be applying for Medicaid in short order. He has no income. He does have a Cash Value Life Insurance policy, I believe in the $50K amount arena, and he has an IRA.

    He didn't share with me - or wouldn't - the amount that is in the IRA.

    Question: Are IRA's protected from creditors? If so, is there a limit?

    His concern is, if creditors call, can they realistically take money from his IRA? Or, should he consider that a veiled threat. Hasn't happened yet.

    Just wonderin'.

    P.S. He lives in an apartment, and owns his 2006 car. Does not have any passive nor active income.
     
  2. yogooglethis
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    yogooglethis Guru

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    In Fl. and I believe most states are probably around the same amount any liquid assets including retirement accounts,CV life policies,savings,checking etc. count toward the 7500.00 maximum allowable assets to qualify for a medicare Savings program.

    Not sure what creditors has to do with this but if he lies on MSP application about his assets he is committing fraud
     
  3. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    This is a state specific question.

    I know in California, the limit is just slightly above $1 million for creditor protection on qualified plans and IRAs. Almost none for life insurance cash values - just enough to keep the policy going.

    This resource may help in regards to creditor protection in life insurance and non-qualified annuities and has some state-specific references:
    http://summitalliance.net/wp-conten...ction-Within-Annuities-and-Life-Insurance.pdf
     
    DHK, Jul 18, 2016
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  4. Bob_The_Insurance_Guy
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    Bob_The_Insurance_Guy Guru

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    Sorry.

    Forgot to mention. This is for the State of Georgia.
     
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