CELA and Medicaid annuity

Kibbee

Met with a CELA.  A bit pricey but worth it since I feel better informed now.  Some of what we discussed was reassuring, some was thought provoking, and some was slightly alarming.  Under the category of thought provoking was the strategy of using some of DH’s retirement fund to purchase a Medicaid Annuity.  As I understood it, if done correctly it moves the funds out of the Title 19 countable designation into the exempt designation.  I am feeling a bit skeptical.  Sounds too good to be true plus I have always been wary of annuities.  Just wondering if anyone has had experience with this strategy and how it worked (or didn’t) for you.  (I live in Wisconsin and realize other states may have different rules.)

jfkoc

I do not remember this approach discussed here. Hmmmm

https://www.medicaidplanningassistance.org/eligibility-by-annuity/

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Caring4two

https://www.medicaidplanningassistance.org/eligibility-by-annuity/

Caring4two

https://www.medicaidplanningassistance.org/eligibility-by-annuity/

Kibbee

Thank you for posting that link, it was very informative.  Sounds like this strategy may work in some situations but it’s best to approach with caution.  These annuities are irrevocable so there is no getting out if you’re unhappy with it.  These annuities create an immediate income stream so understand and be prepared for what that will entail. (Taxes?) The State will be the beneficiary and upon the death of the applicant the State has a claim on the remaining annuity balance as repayment for what they’ve spent on the applicant’s care. (So depending on how much the State claims there may be nothing left for the applicant’s heirs.). Finally, be absolutely sure to work with an experienced Medicaid planner.  And that won’t be cheap! A lot to consider.

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Kibbee

I doubt I would do a Medicaid annuity.  We have funds for private pay for a couple years, and once that is spent there wouldn’t be anything leftover for an annuity.  Regarding the State as the beneficiary, I understand the reason for it.  It would not be a problem for me since we don’t have children, but it might be a concern to others who are considering a Medicaid annuity but also hope to leave something to their heirs.

Stuck in the middle

My CELA (Missouri) suggested an annuity also.  I haven't had occasion to do it as yet, but I think it might be something you want to consider, especially if most of your retirement funds are in his name.  In that case, his care might leave you with inadequate funds to maintain a decent level of living. 

It is important that annuities need not be for your lifetime.  My CELA suggested a short term annuity of a year or so, payable to me. This would have the effect of transferring her funds to me in a manner that would shield them from Medicaid accountability.

fayth

I live in Wisconsin and worked with an attorney who specializes in Medicaid planning.  With her help I got a Medicaid annuity.   This annuity was funded by IRA's that were in my husband's name.  My husband is the 'annuitant' and I am the 'payee'.  The checks come in my name, and for this reason are not counted as part of his income and assets.  We did this 5 years ago, and I feel like it saved my financial future.  Otherwise almost all of our retirement savings would have gone to his care and there would have been nearly nothing left for me. So - in short - it worked well.