All of my mother's assets were spent down, and she's now in a nursing home on Medical Assistance (Medicaid) in Minnesota. My dad is in assisted living. He has an annuity worth about $50k, and has $40k in checking. Two years ago the beneficiary of my dad's estate was changed from my mother to me. I'm wondering if my dad's money is subject still to the five year look back after he passes, or if there is anything that can be done now to protect his remaining assets. They are still married.
CF - please, please find the annuity and review the cash out & surrender terms. It could be quite significant between fees and penalty. If its the usual type of annuity dad can take a small minimum distribution withdrawal amount out annually. If dad did a SPIA well that is probably not an option ever. So the type of annuity matters. Assuming he can take $ out, you may want to do ASAP is take the maximum minimum distribution allowed annually with out penalty. It usually is 10% of face but coukd have a smallish fee. If it were me I'd use up dads liquid $ before ever cashing annuity out aka doing a settlement as it really costs so you want to do that only as a last resort but do the annual maximum minimum withdrawal distribution. Comprende?
Then I'd try to soend down to get dad to the 80k ASAP. Does he & mom have a pre-need funeral & burial done? If not, get those done ASAP, do the max min out of the annuity and maybe prepay his AL a couple of months or prepay funeral floral (usually not included in funeral burial preneed), get dental work done (or maybe post throat cancer cancer dental health treatment) to get him to 79k and get that A&A application filed. I'm assuming you have the A&A at the ready & just waiting for the magic asset # to file?
It's going to be quite the juggling act to get done but it could all work to get him to get A&A and not have to do a settlement cash out on that annuity. So dad is able to between his income & A&A pay for AL and not touch the annuity except for the annual min max so he dies with it still in place and available to you as his beneficiary. As annuities usyally pass outside of probate, it's not a recoverable asset for MERP.
Geez louise annuities and the advanced & ill elderly......you wanna be peeved? Review the commmision the from the annuity to the insurance agent.
They now do IVAP - Income for VA Purposes. For couples it's 80k & singles it's 50k plus home & car. I know your thinking wtf as that's less than medicaid application for couples with a community spouse situation. Ah but wait ....there's more.....under VA A&A now "income " is counted differently as VA seems to allow for some medical or medical related costs to be used to lower "income". So each applicants IVAP is unique.
At some point in the near future with the oncoming tsunami of baby boomers there will be no way for either states medicaid or the VA to pay for care at the rate (& it's increasing) cost in the long term. 100k - 150k paid out on average for a year of NH just isn't sustainable either for families or govt.. Personally I'd like to see the current crop of candidates talk about how this is going to work & just how there are going to enough low-wage workers to staff facilities if there arent immigrants. Walls....yeah well there will be folks from the US going over those walls to line in & get care in NH in Latin America. But I'll stop as this is not a political site.
That money can be used for their own needs.
If your Dad passed now, he can will his remaining money to his children. The money will not be taken for the care of his spouse. If your Dad outlives his money and goes on Medicaid then there will be no estate to preserve.
Good Luck.
also, igloo, is withdrawing from the annuity like withdrawing from an IRA, know that's also been an issue been dealing with with the A&A, those distributions count as income.
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