The thought of a spouse having Alzheimer’s and needing long-term care at a nursing home can bring on a lot of anxiety, especially when logistical concerns and care coordination issues are brought to the forefront of the move. When you throw any sort of financial planning for Medicaid eligibility into the mix, you’re just adding more stress to the situation. This is because there are strict asset limits that must be followed by the healthy spouse, otherwise known as the community spouse, and asset and income limits that must be followed by the spouse needing medical care. One financial plan to qualify for Medicaid eligibility is to use an annuity.
For this plan to work, a large amount of cash is used to purchase an annuity which guarantees future payments in the form of income over the community spouse’s lifetime. While the spouse requiring Medicaid must adhere to both income and asset limits, the community spouse has no limit placed on the amount of income he or she can earn. In executing this asset protection plan, the spouse applying for Medicaid benefits purchases an annuity with his or her own assets, and that annuity would then be used as income for the community spouse.
Please understand that this is a simplified explanation of how annuity planning for Medicaid eligibility works, which is why it’s important to consult with an experienced Ohio elder law attorney before you take any actions. For example, all annuity payments must be made before the end of the community spouse’s life expectancy, and the state of Ohio is required to be named as the primary beneficiary of the annuity following the community spouse. This is to ensure that the remainder of the annuity payments return to the state in repayment of the Medicaid benefits. The annuity must also be purchased commercially, which means that a private annuity agreement between family members would disqualify an applicant from Medicaid eligibility.
There are several other rules and regulations with regards to asset protection strategies featuring annuities covering topics such as transfers, revocations, and community spouse life expectancy, and the amount of money in each monthly annuity payment. It’s best to consult with an experienced elder law attorney who knows the ins-and-outs of planning with annuities to achieve Medicaid eligibility.
If you have more questions about planning with annuities for Medicaid, or if you’re currently applying for Medicaid for a loved one with Alzheimer’s and would like some advice, please contact our Ohio elder law office at 877-653-3450 to schedule a complimentary initial consultation.