Can you use an annuity for Medicaid Asset Protection?

There are many types of annuities in the financial products market. However, for asset protection for spouses of nursing home residents, in regards to Medicaid, you must have an irrevocable immediate annuity. An irrevocable immediate annuity is a product where you pay a sum to an insurance company in return for a guaranteed monthly payment for the balance of your life or a term of years. In Maryland the purchase of an “actuarially sound” annuity is not a gift when considering Medicaid qualification. This purchase is deemed an income stream Therefore, does not cause any Medicaid disqualification. We show our clients the benefits, and how to use the irrevocable immediate annuity that changes a Medicaid countable asset to a Medicaid non-countable asset, by producing an income stream for the community spouse. This provides the community spouse, an increased standard of living, by increasing the monthly income, rather being impoverished. Beware of financial advisors and planners who are not familiar with Medicaid nursing home asset protection strategies. The annuity must conform to Maryland and Federal law (a) It must be irrevocable (b) You must be guaranteed at least what you paid into the annuity over the balance of your life expectancy (c) If you purchase an annuity with a term certain, it must be shorter than your actuarial life expectancy. (d) However, the State of Maryland must be named the beneficiary up to the amount of Medicaid paid.

Unfortunately, we cannot utilize purchasing an annuity for a single person. We have to utilize a gift and return strategy.

To learn more, visit our WEBSITE.  Also, we have written a FREE Handbook – Questions to ask the Nursing Home if you would desire a copy. Please email or call our office 301 663 9230 for more information on annuities, asset protection, and Medicaid.

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