In this Elder Law Minute, Wes Coulson explains how the Medicaid-Compliant Annuity does not count as an asset and can be beneficial when used as income toward nursing home payments. Call DCEL today to learn more!
Greetings! I’m Wes Coulson from Dent Coulson Elder Law and this will be your Elder Law Minute. We’re happy to present these because we think we can help inform you as to the ways in which we can help you and the things that you need to think about relative to the elder care and estate planning journey. Hope you enjoy.
This is another of our series of videos on the subject of what an Illinois Medicaid Applicant can and can’t keep. So in this video, I’m going to talk about pensions and annuities. Pension is money that you get from an employer from whom you’re now retired and the rules on those as to whether it counts as an asset or not, basically asks the question: can you access more than just a monthly check? If you only get a monthly income check and if you call the employer or the pension fund and say, hey I would like to get a big lump sum and the answer is no, sorry you get a monthly check, that doesn’t count as an asset; it just counts a part of your income. If you can get the lump sum out, then it does count as an asset now if you had to pay some kind of a penalty to get the money out, let’s say $50,000, you take out and you had to pay a five-thousand-dollar penalty, it counts as the amount you could get out minus the penalty that you had to pay.
Annuities: An annuity is an arrangement by which you invest money with an insurance company that’s going to then pay it back to you over time, in accordance with what you and the insurance company have agreed to. So there’s lots and lots of different kinds of annuities. They all count as assets with one exception, and that is something called a Medicaid-Compliant Annuity. We use Medicaid-Compliant Annuities a lot, especially in the case of somebody who has an IRA or other qualified asset, because it is a great way of turning them into income that might be needed to pay the nursing home temporarily during an initial delay in eligibility that has been caused by gifts that we’ve made as part of the planning. There are really, really strict rules for these Medicaid-Compliant Annuities, but they are also a tremendous tool.
I guess the lesson here is, if you have any kind of an annuity, or if you need income because of gifts during a penalty period, these are the sorts of things that you need to see a really qualified elder law attorney for help with. But, it’s going to do a world of good. So give us a call, because we are the ones to help here.
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.