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I vaguely remember someone saying North American had some good ones that were Medicare compliant.
I vaguely remember someone saying North American had some good ones that were Medicare compliant.
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this thread was very informative.
this will help me with a current client of mine who's husband just had a major stroek.
this will help me with a current client of mine who's husband just had a major stroek.
Those of you who are new and are following this thread...It is about Medicaid Compliant Annuities, NOT Medicare.
Because of the rules it is not possible to shelter money in an annuity once you reach a certain threshold. It has to be taken out in an income stream based on life expectancy and there are spousal income limitations, so... someone who is older and has $800k and annuitizes the money into an income stream for the non institutionalized spouse will still end up paying for the institutionalized spouse's LTC in most situations.
Most of us avoid this stuff. If an elder law attorney or an accountant recommends a client buy one of these, most of us are not qualified or licensed to give advice contradictory to the recommendation. You sell the annuity, have the client sign some kind of disclaimer and move on...
Because of the rules it is not possible to shelter money in an annuity once you reach a certain threshold. It has to be taken out in an income stream based on life expectancy and there are spousal income limitations, so... someone who is older and has $800k and annuitizes the money into an income stream for the non institutionalized spouse will still end up paying for the institutionalized spouse's LTC in most situations.
Most of us avoid this stuff. If an elder law attorney or an accountant recommends a client buy one of these, most of us are not qualified or licensed to give advice contradictory to the recommendation. You sell the annuity, have the client sign some kind of disclaimer and move on...
- Thread starter
- #54
Chuck,
I did meet with the Client. He is under the assumption, via advice from an elder law attorney, that he can annuitize his money and avoid the income as a countable asset. I did advise him I would require a signed statement that he was purchasing the annuities on the advice of an attorney, he has agreed. I am writing the deal up next week.
I did meet with the Client. He is under the assumption, via advice from an elder law attorney, that he can annuitize his money and avoid the income as a countable asset. I did advise him I would require a signed statement that he was purchasing the annuities on the advice of an attorney, he has agreed. I am writing the deal up next week.
Golfnut,
when he gets the check this time next year from the insurance company for his first $160,000 "income payment", what is he going to do with it?
The attorney is correct in saying that the income of the community spouse is exempt. And there is no limit on the amount of income the community spouse can have?
But if he deposits that check somewhere, won't it, at that point, become an asset?
And, if it is an asset at that point, then isn't it above the $109k limit for the CSRA? If so, about half of it (about $80K) would have to be spent on her care before she could re-qualify for Medicaid.
There's no way an elder law attorney is that stupid.
I've seen attorneys who are not "elder law" attorneys make dumb decisions like this. I had one tell me one time to immediately transfer the title of the house to the daughters after a relative had a stroke. He did not realize that such a transfer would have cost them about $100k in capital gains taxes PLUS it would have PREVENTED the relative from qualifying for Medicaid for about 8 years.
This poor old man is getting advice from a "general practice" attorney who does NOT understand Medicaid.
Think about it. This "attorney" is recommending that he withdraw $800K from some account. After withdrawing the money, buying the $800K 5-year period certain SPIA, he walks down to the Medicaid office and applies for his wife to get Medicaid.
Ofcourse, Medicaid will ask for all their financial information. Medicaid will see that he had $800K a few weeks before and now that $800K is gone. They'll need to see a copy of the annuity contract. They'll see that it does meet the DRA requirements.
But, all the worker has to do is make a little note to follow up the day after the first annual payment. On that day, the CSRA will be above $109k, and the wife will automatically be disqualified for Medicaid.
No elder law attorney is that dumb.
when he gets the check this time next year from the insurance company for his first $160,000 "income payment", what is he going to do with it?
The attorney is correct in saying that the income of the community spouse is exempt. And there is no limit on the amount of income the community spouse can have?
But if he deposits that check somewhere, won't it, at that point, become an asset?
And, if it is an asset at that point, then isn't it above the $109k limit for the CSRA? If so, about half of it (about $80K) would have to be spent on her care before she could re-qualify for Medicaid.
There's no way an elder law attorney is that stupid.
I've seen attorneys who are not "elder law" attorneys make dumb decisions like this. I had one tell me one time to immediately transfer the title of the house to the daughters after a relative had a stroke. He did not realize that such a transfer would have cost them about $100k in capital gains taxes PLUS it would have PREVENTED the relative from qualifying for Medicaid for about 8 years.
This poor old man is getting advice from a "general practice" attorney who does NOT understand Medicaid.
Think about it. This "attorney" is recommending that he withdraw $800K from some account. After withdrawing the money, buying the $800K 5-year period certain SPIA, he walks down to the Medicaid office and applies for his wife to get Medicaid.
Ofcourse, Medicaid will ask for all their financial information. Medicaid will see that he had $800K a few weeks before and now that $800K is gone. They'll need to see a copy of the annuity contract. They'll see that it does meet the DRA requirements.
But, all the worker has to do is make a little note to follow up the day after the first annual payment. On that day, the CSRA will be above $109k, and the wife will automatically be disqualified for Medicaid.
No elder law attorney is that dumb.
Golfnut is neither an attorney, accountant, or Medicaid Case Worker. He is doing the right thing. As an agent he could be held liable for NOT abiding by his clients wishes and the attorney advice.
As I understand the rules you are not wrong Never-dull, but golfnut has done is due diligence, and is abiding by the clients wishes and the attorney advice.
As I understand the rules you are not wrong Never-dull, but golfnut has done is due diligence, and is abiding by the clients wishes and the attorney advice.
- Thread starter
- #58
Hey, What else can I do? walk away from the deal? NO way! I hear your logic Never and I agree. I appreciate all the feedback as I was not aware of the rules myself. I did email links outlining the rules to this Client advised him in writng(email) and by telephone and in person. He is satisfied that the attorney is giving him sound counsel and the attorney is providing him with an opinion letter on his case. So, I have done my part,letting him know I do not agree with the advice he is recieving. This client was reffered to me by a very good client and I feel the obligation to do this deal from that angle. I have consulted with my attorney and feel that I am in the clear on the matter. Furthermore, the only son was in on my meeting with the father and he is aware of the situation. I am glad I brought up this issue on the forum as it has made for a livley discussion and made more of us aware of the rules. I also hope that my response and handling of this matter is what any good agent would do... ask questions, get answers, advise my client of what I think is right, etc.
- 1,802
I would not walk away from this case. As Patch has said, you are not the attorney, therefore can not be held liable for his advice.
I would recommend having the attorney draw up a letter explaining and outlining your involvement with this particular case, and have the client sign it.
I would also involve the children, if possible, and have them sign something to the same effect. This will do nothing but help safeguard against any future litigation.
Great topic; thanks for posting, and I hope you get the account.
