My mother-in-law has two small annuities. She was told by a lawyer that she will not qualify for Medicaid because of them - can she put them into a trust? Can Annuities be put into a Miller Trust or a Qualified Income Trust?
Mom would be the "community spouse" if/when dad applies for Medicaid... She would be entitled to half of their countable assets (look up for your state on google to learn what that means - I speak as an experienced layman and former community spouse).
The only thing that "bothers" me about you post is your saying a "lawyer." What kind of lawyer? Who recommended him? (When my wife needed Medicaid we went to see FOUR so-called elder care lawyers...It was obvious to me that they did not know much about Medicaid, but only were pushing trusts.) We got lucky and found and used the chairman of the eldercare section of our state's "Board of Lawyers" I forget the correct name of the board....
It is encouraging that the value of the annuities is small.
My wife died recently after nearly ten years on Medicaid.. Our house has been in a trust with me as trustee all that time...Medicaid will come after the house when I die. Current law is such that they are not going to get it, a I understand it...I cannot explain further than that because I do not know.
I am trustee of my own trusts, with alternates named in case I am incapable of handling it. Whether you can be trustee depends on the type of trust. You need an estate-planning lawyer (not one that just does simple wills). Transferring funds will have an impact on Medicaid qualification if done within the 5-year look-back period (unless this has changed - used to be a 2-year look-back). I know people don't want legal fees, but in this instance a lawyer may be able to save you thousands down the line.
Can transfer funds between spouses with no lookback. Also research Medicaid compliant annuities. I used a firm headed by Dale K. (google it) and was beyond delighted with the service and very low fee. Odds and ends...countable assets include more than one vehicle..if you have two or more cars/motorized RVs, motorcycles, and so on, you get to keep just one with no complications...Two or more mean their value is counted as though they were money...Lots of stuff to find out...I just mentioned a very few.
My husband and I had all our properties except the house in a trust, which worked well for us. We were the trustees, so when he passed, I was the trustee, and sold off all the properties with no probate or anything. The house had been in joint tenancy which passed automatically to me and I had no problems when I sold it. My kids (which include a lawyer, an accountant, a business owner, and a loan officer) are the successor trustees, lawyer son primary. If family members are trustworthy, that is the easiest. We had ours done by a law firm associated with my business, and they don't sell any financial products. That's the thing to watch for.
First, get a good elder care attorney. It may cost several thousand, but it saves you that much in a few months time. I just went through the process with both my mother, then a year later, my stepdad. You are not allowed to keep any annuities for the person needing Medicaid. Prepaid funerals are safe also. They can't touch those. They can, however, take cash if you are saving it with intentions of a funeral. Bottom line, if your Dad needs Medicaid, attorney helps you to turn assets over to your mother, but when she becomes in need for Medicaid, the process with an elder care attorney starts with her. I got a discount with the second parent, on attorney's fees. I could not have gotten through this without the attorney, and my parents would have lost in the long run.
Kathy - you say their "small". Like each about 20k small; or 200k small? To me, the amount makes a big big factor as to just what to do & if it's worth doing certain things.
Also other ?'s: is mom taking out the maximum without penalty withdrawal annually from each? what type of annuities? When do they end & what age will mom be then? And is mom going to qualify medically to be "at need" for medicaid as your state runs Medicaid?
Contact a qualified elder care attorney. As the folks above said, the rules vary from state to state and these are matters that really should be addressed by someone familiar with the legal rules
There is something I am considering here. Since the annuities are being drawn from yearly, they are in pay-out mode. Retirement IRAs and annuities are not countable when it comes to Medicaid if they are in pay-out mode. They are still assets, but won't be counted when figuring if someone qualifies as long as the bank balance does not exceed the max allowed during any month. She would have to be careful so a lump paid in a year doesn't put them over the maximum. I would talk to the Medicaid officer about this. I don't know if this just refers to retirement annuities or if it is any annuity. It's also hard to determine if the annuity that is in her name alone belongs only to her or is an asset of the marriage.
It is my understanding that once you are receiving payments on annuities they are not assets. My mom has an annuity that pays her for life. There is no cash value. It only counts as income not an asset. She has another one that had a 15 year guarantee but 15 years have passed. Check the fine print on your annuities. You are usually turning over your assets to the annuity. That is why they are so profitable for those who sell them. In my mom's case, however her principle was paid back to her several years ago.
She would be entitled to half of their countable assets (look up for your state on google to learn what that means - I speak as an experienced layman and former community spouse).
The only thing that "bothers" me about you post is your saying a "lawyer." What kind of lawyer? Who recommended him? (When my wife needed Medicaid we went to see FOUR so-called elder care lawyers...It was obvious to me that they did not know much about Medicaid, but only were pushing trusts.) We got lucky and found and used the chairman of the eldercare section of our state's "Board of Lawyers" I forget the correct name of the board....
It is encouraging that the value of the annuities is small.
My wife died recently after nearly ten years on Medicaid.. Our house has been in a trust with me as trustee all that time...Medicaid will come after the house when I die. Current law is such that they are not going to get it, a I understand it...I cannot explain further than that because I do not know.
Grace + Peace,
Bob
Also research Medicaid compliant annuities. I used a firm headed by Dale K. (google it) and was beyond delighted with the service and very low fee.
Odds and ends...countable assets include more than one vehicle..if you have two or more cars/motorized RVs, motorcycles, and so on, you get to keep just one with no complications...Two or more mean their value is counted as though they were money...Lots of stuff to find out...I just mentioned a very few.
Grace + Peace,
Bob
Bottom line, if your Dad needs Medicaid, attorney helps you to turn assets over to your mother, but when she becomes in need for Medicaid, the process with an elder care attorney starts with her. I got a discount with the second parent, on attorney's fees. I could not have gotten through this without the attorney, and my parents would have lost in the long run.
To me, the amount makes a big big factor as to just what to do & if it's worth doing certain things.
Also other ?'s:
is mom taking out the maximum without penalty withdrawal annually from each?
what type of annuities?
When do they end & what age will mom be then?
And is mom going to qualify medically to be "at need" for medicaid as your state runs Medicaid?
Check the fine print on your annuities. You are usually turning over your assets to the annuity. That is why they are so profitable for those who sell them. In my mom's case, however her principle was paid back to her several years ago.
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