Medicaid Compliant Annuities (i.e. Medicaid Friendly Annuity)
When it comes to determining whether a client is eligible for Medicaid, compliant Medicaid annuities are not considered countable assets. Even though this is the case, the income that is gained from a Medicaid compliant annuity could still be considered when it is time to do the income qualification part of the application. A unique thing to these Medicaid annuities is that the balance of the annuity is used to pass to an heir without that asset being used to pay back the state for any aid that was given. Now, it is required that the state be named the successor beneficiary of the annuity after the client's death.
If there is a spouse or a disabled or minor child who is named the beneficiary, the state must then be named the next beneficiary. In this case the state will have no choice but to wait for the death of the other named beneficiary before any debt can be collected. In addition to this, there may be a statute of limitations that could apply if the spouse or the child does not die soon enough.
If the Medicaid recipient is single and has no children and dies before the annuity has paid all of its income, the state will then receive the income in installments each month until the life expectancy date of the Medicaid applicant. Any amount that is left over after this happens will be paid to the remaining heirs.
Medicaid compliant annuity (i.e. Medicaid Friendly Annuity) may pay the state for nursing home costs and not transfer to the heirs
Medicaid compliant annuities can present a few problems when determining certain things. This is why it is very important for the Medicaid applicant to make sure their spouse is named the beneficiary of the annuity. If this is not done, the state will step in and take the earning from the annuity, leaving the surviving spouse without that income resource. However, even if the Medicaid applicant does name another person, such as the spouse or a child, as the beneficiary, the state still has the power to step in if the beneficiary does not die in a short amount of time. This will be different for each state, but it is definitely something that must be considered when planning for Medicaid. If there is a Medicaid annuity that is compliant, the Medicaid applicant should make necessary changes to protect the annuity from being taken by the state to pay for nursing home costs. When there are no spouses or children to figure in, the client will most likely lose the annuity to the state and it will not go to an heir. This is usually the case when the client dies before they reach their life expectancy.
Read more information on Medicaid:
- Medicaid asset
- Medicaid Rules Purchasing Annuities
- Medicaid Transfer Assets
- Medicaid Gifting Rules
- Medicaid Joint Accounts
- Hide Assets from Medicaid
- Medicaid Assets
- Medicaid Home Equity
- Medicaid Laws
- Medicaid Annuity
- Medicaid Income First Rule
- Medicaid Long Term Care Insurance
- Medicaid Look Back Period
- Medicaid Life Estate
- Medicaid Loan
- Medicaid Deficit Reduction Act
- Medicaid Case Study