Waiting MRI's results of husband's Parkinson's dx. I have spinal stenosis, RCTs both arms, bicep tears (ty Cipro) and sustained two whiplash and concussion incidents in 2024. His insurance allowing for short term home health plus OT/PT. Having trouble getting in andout of walk-in shower. Spoke with Medicaid planner and she suggested, when time comes, aka 'snap shot' date, I get a Medicaid Compliant Annuity. It will protect my half of the community spouse's income. Any advice? She'll charge $7,500 for her services which is better than the Elder attorney's quote of $12,500. Thank you. Lots of limbo anxiety.
I know someone who has done a SPIA and it worked fabulously for her. It was in retrospect a textbook case of how it works best. We knew her & her late hubs socially and our kids went to elementary school & did a sport together. She was 20++ yrs his junior, he was very healthy and fit 70 when he had a bad accident with a TBI. His insurance was tapped out and she was in panic mode as sold their weekend home but still not enough $ to pay for continuing TBI rehab + mortgage + school. But specialty rehab facility did have LTC Medicaid beds he could be placed into if she could get him eligible. Now for LTC Medicaid only NH person applying has to be impoverished at whatever income and nonexempt asset maximum your State allows. For them, it was asset max of 2K excluding a (1) car & a home with a homestead exemption. Community Spouse income does not count unless it is high; she was SAHM so had no “income”. But they had abt 300K in joint savings. This $ would be there for the snapshot day set for them as a couple & it was over the Community Spouse allowable asset maximum (I think it was like at 100K at the time - now a max of 158K - so they were over). So all but 2K moved in 1 fell swoop to become a SPIA for her which in turn paid her the lowest possible income each and every month that was actuarially sound for her age with no cash value. It was low enough of income to her (as she was way younger) that she was actually short to be able to pay mortgage, car note, kids expenses, etc to the point that her attorney also filed for CRSA / Community Spouse Resource Allowance for her as well. (This is totally savvy atty work as CRSA is kinda like old school alimony). LSS she got about half of his SS income waived to her each month, with the rehab NH getting only the other half as his Share of Cost that LTC Medicaid requires. So btween his SS waived to her and the SPIA income, she was kinda ok financially & more importantly, he was LTC Medicaid eligible in a really good facility that could deal with his TBI issues. He died maybe a year later.
Her being so much younger mattered big time, as the income paid is dependent on actuarial tables. She was way younger and healthy, so very unlikely to herself be needing a NH or even an AL of IL herself for decades. If you are older, probably you flat do not have the time to do the income stream spread out of $ for years and years. If you yourself have health issues so you may need to go into a facility in the near future, doing a SPIA may not be a great idea. For our friends situation, SPIA was pretty fab & it was a divorce atty she spoke with that suggested it and he turned it over to a FA and a CELA attorney he worked with.
If whomever you spoke with did not mention that the SPIA has to be actuarially sound, irrevocable, no cash value, non-assignable….., well if it were me, I’d be wary. Just sayin’.
Am so worried plus angry. Believe both attorney and certified Medicaid planner said if he eventually needs Medicaid, state would also take my small $400 annuity to pay for his care. My dilemma. Use that $45,000 for condo or hold onto it and pay the certified planner the $8000 (believe half now and balance when he does into NH) I have my own IRA and believe they can't touch that. Hope you read this as value your opinion. Ty
For my State it’s 158K that a CS can have as their own assets. The NH spouse is still at the teeny 2K in assets. So if they have over 160K in nonexempt assets, then that Nh spouse will be ineligible unless there is something done to get to the magic 160K.
For my friend, a big factor in all this was that they wanted him to stay at this specific facility as it was specialty rehab. They didn’t want him to leave and go to a regular NH/SNF. He needed a TBI care plan with staff who did this. He absolutely had to stay there and something had to happen asap to keep him there as they had a rare LTC Medicaid bed. Doing the SPIA was the Voila! magical $ move that allowed for this. But it seemed it worked because she was so so so much younger and the payout to her spread out over decades. If she had been his contemporary in her 60’s or 70’s, I don’t think it could have worked. If I had been her, I would have done the same, it’s was a clean and clear solution to a problem that was on a timer and the attorney’s & FA involved were / are all solid pros.
If whomever is this “Medicaid planner” isn’t an attorney and isn being transparent on the breakdown on fees & on just what commission that annuity is going to pay them and how the commission is structured and the rating on the underwriter, well, I’d want to see all that and take this info to an CELA atty to get a opinion and what options they suggest. So often annuities are sold to fearful and gullible folks who don’t fully understand what type of insurance product an annuity actually is.
An annuity is different as it pays income. It is an insurance product owned by an individual so tied to their SS#. For the OP, a Medicaid planner suggested she move $ into a SPIA, a very specific type of annuity used for over resourced in assets Community Spouse situations. It’s a very special creature.
As annuity ownership remains tied to the person, is why Medicaid or any other at-need eligibility “allows” for it, & does not view the $ move as gifting. It is the individuals $ that gets placed into the annuity and technically owned and controlled by the individual and annuity pays income to the individual. It will have a beneficiary (& the State can require a beneficiary change to be the State if the person goes on a State program, just like what SNT can be required to do). The insurance agent who sold it gets commissions &/or fees and can pay a % to a nonagent who secures clients.
SPIA have all the regular annuity stuff plus more requirements. In my understanding on SPIA…. & imo here’s where it gets real in the weeds…. whether or not it can be “compliant” for LTC Medicaid Community Spouse situations will be dependent on precise requirements a State places for SPIAs. Not all States even allow for a SPiA (mine does). Those that do will have a set list of requirements and restrictions. One requirement is it must be actuarially sound. & to me, that’s the sticky part if you are older as avg life span in the US is 77. So that $ has to flow out & paid to the CS within whatever the specifics are for your precise demographic for it to be compliant for LTC Medicaid. That $ the annuity pays the CS is income. So if the CS themselves have their own SSA income $ plus that SPIA income $, they may… just may… find that their income as a CS to too too high that they they end up having to pay part of it for the Share of Cost for their spouse in a NH (horrors!). Or that their income is too high for them to file a CSRA waiver to keep some of their NH spouses income (disappointing). It’s a real #s analysis to see if it makes sense. Cause once that $ goes into the SPIA…. it’s irrevocable as far as I’m aware.
Why it worked well for our friend was that she was way younger. Wasn’t a May - December marriage, it was a Jan - Dec marriage, lol. Had decades to let her SPIA pay out. She’d likely outlive it.
If in your 60s or 70s, you don’t have decades to spread out SPIA $ to be ok for life expectancy tables. To me it’s all interdependent on the $, their debts, their age & what their State allow an CS to retain in assets, as to if it makes sense for a CS to do a SPIA.