Can a Roth IRA be transferred into an Irrevocable Medicaid Asset Protection Trust? Yes, and that transfer will not trigger income taxes, but the funds transferred will no longer be considered as a Roth. As a result, income taxes will be due on future income produced by those funds inside the trust, and capital gains taxes will be due if the investments in those funds are sold at a profit. It is important to remember that if Roth IRA funds are left outside the trust, they may have to be used up to pay for nursing home costs. This should be discussed with a knowledgeable Elderlaw attorney.
-Attorney Jack N. Alpern
Latest posts by Jack N. Alpern, Estate Planning Attorney (see all)
- The Inflation Reduction Act - September 13, 2022
- How Do I Trust Thee…Part II - July 1, 2022
- How Do I Trust Thee…Part I - July 1, 2022
