Also imo, if it’s actually just 50k that’s available for the Community Spouse to annuitize, it’s not enough $ to make it worthwhile. 200k is a good SPIA not 50k.
50k is to me more spend-down range by both the CS and the about to apply for LTC NH Medicaid spouse. Like they pay down debt; or get repairs done now on the home where the CS is going to be living at; or get costly dental work done; or turn in both their older cars and use some of the 50k to get 1 better newer more dependable car for the CS; or they both get a pre-need funeral policy; update their legal. No gifting. Whatever the spend down, all $$ is through their banking completely AND BEFORE the About to be in a NH spouse Medicaid application submitted.
To me, Medicaid planning when there’s a CS is not ever a DIY but needs a NAELA or CELA level of attorney as it complicated to start and what happens after death with estate Recovery that the CS will have to deal with very much interdependent on your states laws.
If your feeling pressured by annuity salesman, ask them in writing to provide to you based on a 50k policy - what all their commissions and fees are on the policy from now till payoff AND -what the full surrender charges & fees are at 2 years and 5 years AND - what the annual penalty free maximum take from the principal is and if this has fees and what those fees are AND - that it is Medicaid compliant for your states LTC Medicaid program. Not Medicaid allowed or qualified but compliant. As you plan to submit the letter to both Medicaid & your Dept of Insurance. Bet they never contact you again.
SPIAs to me only work if there is a community spouse AND it’s realistic for the CS to live on their own for a good while AND likely to outlive the in the NH spouse AND those assets to buy the SPIA are significantly beyond the 12Ok liquid allowed for the CS to have as exempt assets so they can buy a 6 figure SPIA. Its income only to the CS, so doesn’t count for Medicaid. It should be done prior to Medicaid application so it’s already moved out of the bank before the “snapshot” date set for Medicaid.
SPIAs are speciality underwriting & as such there are actually just a small group of SPIA underwriters in the US. You have got to make sure that if your a CS that it’s truly a Medicaid compliant SPIA suitable for a CS and not some other type of “annuity” that is Medicaid eligible.
Imo there lots of smoke & mirrors out there on anything annuity. So often for elders, annuities are touted to them as a way around ”guvmit gonna get yur $” and sold to them at those free chicken dinner seminars and sold by salesmen on commission that dovetail the sale to an insurance guy that holds the actual state insurance license. Annuities are insurance products. Anyone with an insurance license can sell them. Your State Farm type of insurance agent can sell them. Most annuities are NOT - again - NOT Medicaid compliant. Often you’re told that they are “eligible” or “qualified” for Medicaid, that’s a bit of a deflection as what that likely means is they are not viewed as gifting with a transfer penalty placed by Medicaid or inappropriate transfer of assets by Medicaid for moving $ into the annuity. But IF they are not actuarial correct for your specific demographic and within whatever limits Medicaid places on annuities (this varies by state & can include commission & fees charged) and have Medicaid as the primary beneficiary then they are NOT compliant for Medicaid. If not Medicaid compliant, then they have to be surrendered in order to get your Medicaid application approved. Surrendering any insurance policy is painfully costly to do. Insurance agent likely doesn’t care as they get their commission no matter what. If I had to guess, the most common problem will be that the annuity has a payout that ends in their 90’s, which is outside of any actuarial table, so not Medicaid compliant.
SPIAs imo do NOT ever work for an individual applying for Medicaid.
A better Financial Advisor (the type with a series 7 and with a wire house) will know which underwriter does SPIAs, if your current elder law atty does not have someone they refer to. Krause is imo a market leader in SPIAs & their website has good info, although getting one is not a DIY but through your FA or NAELA level atty.
I’ve know a couple of younger 2nd & 3rd wives who have gotten SPIAs & it totally rocks as they will likely outlive both their older hubs and the SPIA. And structured the income paid to be low enough not to affect any “at need” program eligibility.
This is definitely one of those "consult with an elder law attorney" situations, particularly before buying the annuity. The agent will promise you the moon, but just realize that they get their commission upfront and may not always have your best interests at heart.
50k is to me more spend-down range by both the CS and the about to apply for LTC NH Medicaid spouse. Like they pay down debt; or get repairs done now on the home where the CS is going to be living at; or get costly dental work done; or turn in both their older cars and use some of the 50k to get 1 better newer more dependable car for the CS; or they both get a pre-need funeral policy; update their legal. No gifting. Whatever the spend down, all $$ is through their banking completely AND BEFORE the About to be in a NH spouse Medicaid application submitted.
To me, Medicaid planning when there’s a CS is not ever a DIY but needs a NAELA or CELA level of attorney as it complicated to start and what happens after death with estate Recovery that the CS will have to deal with very much interdependent on your states laws.
If your feeling pressured by annuity salesman, ask them in writing to provide to you based on a 50k policy
- what all their commissions and fees are on the policy from now till payoff AND
-what the full surrender charges & fees are at 2 years and 5 years AND
- what the annual penalty free maximum take from the principal is and if this has fees and what those fees are
AND
- that it is Medicaid compliant for your states LTC Medicaid program. Not Medicaid allowed or qualified but compliant.
As you plan to submit the letter to both Medicaid & your Dept of Insurance.
Bet they never contact you again.
SPIAs are speciality underwriting & as such there are actually just a small group of SPIA underwriters in the US. You have got to make sure that if your a CS that it’s truly a Medicaid compliant SPIA suitable for a CS and not some other type of “annuity” that is Medicaid eligible.
Imo there lots of smoke & mirrors out there on anything annuity.
So often for elders, annuities are touted to them as a way around ”guvmit gonna get yur $” and sold to them at those free chicken dinner seminars and sold by salesmen on commission that dovetail the sale to an insurance guy that holds the actual state insurance license. Annuities are insurance products. Anyone with an insurance license can sell them. Your State Farm type of insurance agent can sell them. Most annuities are NOT - again - NOT Medicaid compliant. Often you’re told that they are “eligible” or “qualified” for Medicaid, that’s a bit of a deflection as what that likely means is they are not viewed as gifting with a transfer penalty placed by Medicaid or inappropriate transfer of assets by Medicaid for moving $ into the annuity. But IF they are not actuarial correct for your specific demographic and within whatever limits Medicaid places on annuities (this varies by state & can include commission & fees charged) and have Medicaid as the primary beneficiary then they are NOT compliant for Medicaid. If not Medicaid compliant, then they have to be surrendered in order to get your Medicaid application approved. Surrendering any insurance policy is painfully costly to do. Insurance agent likely doesn’t care as they get their commission no matter what. If I had to guess, the most common problem will be that the annuity has a payout that ends in their 90’s, which is outside of any actuarial table, so not Medicaid compliant.
SPIAs imo do NOT ever work for an individual applying for Medicaid.
A better Financial Advisor (the type with a series 7 and with a wire house) will know which underwriter does SPIAs, if your current elder law atty does not have someone they refer to. Krause is imo a market leader in SPIAs & their website has good info, although getting one is not a DIY but through your FA or NAELA level atty.
I’ve know a couple of younger 2nd & 3rd wives who have gotten SPIAs & it totally rocks as they will likely outlive both their older hubs and the SPIA. And structured the income paid to be low enough not to affect any “at need” program eligibility.