Convert annuity to life case tip

[padthaiforlunch]

Placing the life policy in an ILIT, effectively tosses chairs of the deck, so to speak, when done far enough out of look-back.

Since the Spia is also off deck, then it's a matter of edges. First, by keeping the life premium under the annual gifting limit, you avoid using lifetime gift and inhereritance tax limit. You are gifting the premiums to the ILIT.

By using a certain period spia (say ten years) you risk some of the amount falling into the look-back period since the gift is spread out, but that may be ok, because you have eliminated the look-back on the lump sum.

Obv. the requirements in assets and income vary by state. Anyone doing these should have an elder law attorney they can partner with.

Disclaimer.

Showing folks how to qualify for Medicaid is not my gig so I know enough to be dangerous. I do recall a bit about countable assets in determining Medicaid eligibility. Moving assets from a CD to an annuity, or an annuity + CV life insurance is just rearranging the deck chairs. It doesn't matter where your money is (other than a SP immediate annuity which is a different issue), they still total up your liquid cash assets (and income) before giving the thumbs up or thumbs down.

Moving some of the funds into a SPWL/SPUL increases the potential benefit to the heirs, and changes the tax treatment on the inheritance, but I must be missing something if you are saying it also changes the scope of Medicaid qualification.

 

[insuranceexec]

Who are you using for that? I've been getting pestered by a couple GA's to start using Sagicor for single premium whole life. Apparently, they have an indexed whole life product with an ltc rider.

Word of caution (you prob. already know this): Cash value of life insurance is considered an asset by medicaid if client enters nursing home world and seeks assistance.

Consider using an ilit and an immediate annuity which pays out to the gifting limit each year until exhausted.

You are absolutely correcton both of these points. You may want to google half-loafing which is a legal way of setting up money, that here in Arkansas is exempt from Medicaid planning. I do not know where you are located, but here in Arkansas it has been challenged several times and the client has always come out on top. Just another avenue to consider.

You can then use the money from half-loafing to purchase a guaranteed UL that again passes on to the beneficiary TAX-FREE..

 

[padthaiforlunch]

lol @ googling "half-loafing"

Responses:

Half Loafing Sheds Horse Barns come in many different configurations

I spent half the weekend sleeping and too much of the other half loafing around.

It's being month and a half loafing at hometown

Perhaps you can find a better term to google that will get to the gist of what you are talking about.

 

[insuranceexec]

lol @ googling "half-loafing"

Responses:







Perhaps you can find a better term to google that will get to the gist of what you are talking about.

I apologize you can google half-loafing and medicaid planning or google elderlaw answers and google the term on their site.

Maybe a thank you would be appropriate for giving you a good idea to consider.....

 

[padthaiforlunch]

If anyone wants to googe, the correct term is:

"half loaf" medicaid planning

Thank you.

 

[Charpress]

Half a loaf is better than......

For those who don't want to waste their time Googling like Pad or me, here is the gist of the idea hot of the Google press:

The most common planning technique for a single person
who is either in a nursing home or about to go to one is
called the "half-a-loaf." This is a method whereby for
every dollar you give away, you need to keep one dollar
to pay for the disqualification period for having made the
gift.

 

[padthaiforlunch]

Half a loaf is better than......

For those who don't want to waste their time Googling like Pad or me, here is the gist of the idea hot of the Google press:

The most common planning technique for a single person
who is either in a nursing home or about to go to one is
called the "half-a-loaf." This is a method whereby for
every dollar you give away, you need to keep one dollar
to pay for the disqualification period for having made the
gift.

Thank you for setting a good example.

 

[somarco]

Never been a fan of Medicaid shenanigans. I figure if you have the assets, use them. Don't cheat the taxpayer by hiding assets.

Yes, the lookback is an issue and designed to catch some of those Medicaid thieves.

Glad I don't play that game.

 

[padthaiforlunch]

Never been a fan of Medicaid shenanigans. I figure if you have the assets, use them. Don't cheat the taxpayer by hiding assets.

Yes, the lookback is an issue and designed to catch some of those Medicaid thieves.

Glad I don't play that game.

Not about hiding assets, it's about taking advantage of the rights offered your client under law.

But also, it's important for agents to understand that the whole life policy you sell may be a forced surrender if not set up properly. By not having such a discussion with the client you are not doing right by them.

 

[insuranceexec]

Half a loaf is better than......

For those who don't want to waste their time Googling like Pad or me, here is the gist of the idea hot of the Google press:

The most common planning technique for a single person
who is either in a nursing home or about to go to one is
called the "half-a-loaf." This is a method whereby for
every dollar you give away, you need to keep one dollar
to pay for the disqualification period for having made the
gift.

OM I am sorry I thought the whole idea of this forum was to share the different marketing ideas that are out there in this business, and the different things that an agent might run across.

Why are so many people on here hateful when someone is trying to offer a different point of view? Or give some advice, are you above learning?

Or just think you know so much that everybody should bow at the altar of your own stupidity. Again this is just a thought I do not want to overwork your brains or anything...