Annuities & Medicaid Eligibility Planning In New York

In this day and age, Medicaid planning – that is, planning out one’s estate in a way that allows them to receive end-of-life care via Medicaid – is at the forefront of most people’s minds in Westchester County, particularly as they age. There are many ways for an individual to plan their estate so that they are able to receive Medicaid-based medical care, but every estate is different. A Medicaid-exempt annuity is a method by which one can preserve their Medicaid eligibility without having to worry about exceeding the program’s means test. The right attorney can assist you in choosing one that works for you.

Look For “Medicaid-Exempt” Annuities

An annuity is a contract of sorts between a person and an insurance company. Essentially, one ‘purchases’ an annuity by entering into this contract, and then the person funds their own annuity by paying a large sum, to be disbursed in equal amounts from that point until the person’s passing. They may make smaller payments at a later point to ensure the annuity remains funded, but it is not strictly required.

Annuities are useful, adaptable financial tools that can help to smooth out finances in many situations – but in terms of estate planning, it is important to be aware that only certain annuities will be useful. “Medicaid-exempt” annuities must meet certain criteria in order to help a person meet the program’s eligibility requirements. The annuity must be:

• irrevocable;
• Non-assignable, meaning it cannot be sold or transferred to anyone else;
• ‘Actuarily sound,” meaning that the recipient’s entire investment must be paid out before their passing;
• Structured so that the state’s Medicaid agency is the beneficiary after the person’s passing (at least up to the amount the agency paid for the deceased person’s medical care); and
• The payments must be equal, to comply with Medicaid’s income guidelines.

Pros & Cons

For many, annuities can solve the problems that often come with Medicaid means testing. Each state has an asset limit and an income limit, neither of which can be breached in order for a person to qualify for the program. If a person has already exhausted Medicare benefits, if they are already paying out of pocket for care, an annuity can serve as a fixed income of sorts, allowing an individual to keep their net worth under the limit.

That said, some people will benefit less from the structure of an annuity than they might while using other estate/Medicaid planning instruments. Those who do not have a large amount of assets, or who need more liquidity in terms of their finances, may choose other estate planning tools in order to keep that autonomy. While every estate is different, Medicaid-exempt annuities can make all the difference between a person being able to receive medical care and going without.

Contact A Pleasantville Medicaid Planning Attorney

No one wants to think about getting old – but it is crucial to plan for a time when you may need significant medical care. The Westchester County elder law attorneys from Meyer & Spencer, PC can help you structure your estate so you can spend your golden years doing what you love. Call our office today to schedule a consultation.

Source:

lhc.naifa.org/lecpblog/what-makes-an-annuity-medicaid-compliant