What can you do when a nursing home resident who has already qualified for Medicaid benefits receives an inheritance? The receipt of funds will disrupt program eligibility, assuming they cause the individual to exceed his or her countable resource limit. Several planning options to maintain program eligibility exist, one of which is to use a Medicaid Compliant Annuity.
In the recent matter of Geston v. Anderson, the U.S. Court of Appeals for the Eighth Circuit has affirmed a judgment in a North Dakota married couple case on calculating assets for Medicaid eligibility. Mr. Geston became a resident at a nursing home facility in July of 2010, while his wife continued to reside in the couples’ North Dakota home.
In May of 2008 Mr. Jackson entered an Arkansas nursing home while his wife, Mrs. Jackson, continued to reside in the community. In February of 2009 Mr. Jackson purchased two single premium immediate annuities. One of the annuities was an IRA annuity, and provided monthly payments to Mrs. Jackson under the “name on the check” … Continued
An Intentionally Defective Grantor Trust (“IDGT”) is an irrevocable trust created so that the assets of the trust are attributable to the grantor for federal income tax purposes, but not for gift, estate, or generation skipping transfer tax. The “defect” is that the grantor reports all of the income, deductions, and credits associated to the … Continued
Recently, I worked on a case involving an individual who wanted to put his $90,000 IRA into a Self-Settled (d)(4)(A) Trust. Even though I could get the IRA transferred into a tax-deferred annuity owned by the trust, there was a question as to whether the transaction involved a taxable event. To eliminate the question, the … Continued
The income taxation of annuity contracts is governed by Section 72 of the Internal Revenue Code (“IRC”). In the 1980s, as a result of the tax simplification and reform measures, the code section went through extensive revisions. The legislation was intended to encourage the use of tax-deferred annuity contracts as long-term retirement savings vehicles. … Continued