Medicaid-friendly Annuities

[RunnerDude]

I am working with a client who is trying to become Medicaid eligible. I am her Medicare agent. Here are the key factors involved:
1. She is drawing about $1,000 per month from Social Security (lives in South Carolina and is divorced)
2. About a year ago she deeded over a piece of land to her son because she could not afford the yearly taxes
3. She has an IRA account worth about $95,000. She draws from this account occasionally to pay basic bills.
4.. She lives in a small trailer and owns one car
5. She has no other income sources.

I am wondering about the possibility of transferring her $95,000 IRA into a Medicaid-friendly annuity to make her eligible for Medicaid. I am not sure how the "suitability" laws would factor in, and not sure if she would be ineligible because she gave away land to her son (at no cost). Has anyone has had experience with situations like this?

 

[Allen Trent]

Let an elder care attorney handle the compliance with countable & non-countable assets. It is possible the elder care attorney could help to have the IRA turned into a SPIA for a fixed period of years less than or equal to the Medicaid Life Expectancy table.

Also, the attorney can also figure out how long the gift of the land to son will cause her to possibly not be eligible because the deed transfer was within 5 years of medicaid application

Likely can keep car, trailer, pre paid funeral & 2k of other assets

 

[CALTCAgent]

I am wondering about the possibility of transferring her $95,000 IRA into a Medicaid-friendly annuity to make her eligible for Medicaid. I am not sure how the "suitability" laws would factor in,

This is state specific but Qualified funds are already considered unavailable in CA if in payout status, meaning you are taking your RMD. The income is counted from the payout and therefore effects the income limits.

Regarding suitability. I would check with the carrier. Usually with an annuity you need a certain amount of liquid money outside of the annuity to pass suitability.