Using Annuities in Medicaid Estate Planning
This Texas Medicaid Planning Strategy May Help You Retain Your Assets by Buying an Immediate Annuity.
When one spouse needs to go in to a Texas nursing home, one can protect assets from Medicaid by acquiring an annuity.
Texas applicants for Medicaid owning too much cash money or assets – are denied Medicaid for long term care (nursing Home) and have to pay their own nursing home expenses.
For most – their cash savings would be gone in a very short time. Nursing home costs in Texas now exceeds $6,000 per month in some areas. This often leaves the spouse destitute.
Buying an Immediate Annuity can take away these excess assets that are preventing eligibility for Medicaid and replace them with a monthly payout – payable to your community spouse.
Done properly – this technique can allow you to keep a large portion of your cash to provide for the community spouse, who may, we hope – live for many more years to come. And possibly your heirs as well.
Requirements of the Annuity to Avoid Texas Medicaid Penalties
These needs must be met to make a community spouse annuity legas for a Medicaid applicant:
- The annuity must be bought from an insurance company
- The annuity must be immediate
- The annuity must be irrevocable (You wont’ be able to cancel it)
- The annuity must be non-assignable/nontransferable
- The annuity must pay in equal monthly payments
- The term of payments must be less than the life-expectancy of the community spouse – using Social Security life expectancy tables as a guide
- The Medicaid agency for Texas must be designated as the primary beneficiary of the annuity after the death of the community spouse. This allows the Texas Medicaid agency to collect any unpaid moneys should the community spouse die before his or her life expectancy.
Attorney Heiser has devoted an entire chapter of his book to these types of annuities. These are all discussed with many examples in the book
Be sure you are informed of all the tools and techniques available to you under the law to protect and preserve as much of your assets as possible!