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Originally Posted by insuranceexec
A community spouse's monthly income allowance (between $1,750 and $2,739 for 2009 ), as long as the income is actually made ...
A community spouse's monthly income allowance (between $1,750 and $2,739 for 2009), as long as the income is actually made available to her/him;
A family monthly income allowance, if there are other family members living in the household;
An amount for medical expenses incurred by the spouse who is in the medical facility.
The community spouse's monthly income allowance is the amount of the institutionalized spouse's income that is actually made available to the community spouse. If the community spouse has income of his or her own, the amount of that income is deducted from the community spouse's monthly income allowance. Similarly, any income of family members, such as dependent children, is deducted from the family monthly income allowance.
Once the above items are deducted from the institutionalized spouse's income, any remaining income is contributed toward the cost of his or her care in the institution.
Please expalin to me what the term that I have in bold means.
The reason that Post DRA uses the term "Actuarially sound" is to make sure that you do not annuitize the money for a period beyond the life expectancy of the institunialized spouse.
By your own reasoning they could annuitize the money for a period as short as a year; if a company allowed it. And the money would be totally exempt. This is not true; therefore you are incorrect! By your own admission you stated that a SPIA annuity would not work with this situation.
Why would the SPIA not work?
The term that you are using is referring to the amount or "allowance" the community spouse is allowed to keep to maintain his/her lifestyle while keeping their dignity.
You my firend are confusing Pre-DRA with Post-DRA. Stating that the Half a loaf stretegy has been nullified. When in fact it has been changed to accomadate the new laws. I hope this helps......
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Another point to consider is that every state will have their own set of laws regarding "Medicaid Qualification." Check your state laws
No one, including myself, should try to say that just becuase they understand the Medicaid laws in their state; makes them an expert in all states.
Which is why you must be licensed in the state in which you practice; to be familiar with the laws of your respective state. I personally think to badger one another about laws in another's respective state is arrogant, and I apologize for coming across this way. Have a good day!
------------------------------------ Direct 1-866.417.9580 X 109 mail@ngfgllc.com
Last edited by insuranceexec : 04-20-2009 at 12:21 PM.
Reason: Posts merged
I thought you would consider this a viable source; considering that you quoted them several posts back.
It is up to the courts and the attorney's to figure how they apply to each person with their own particular case. The judicial branch's sole responsiblity is to "interpret" the law. That's right it is an interpretation; which is why it is always open to be over-turned.
I also highlighted this:
If the community spouse has income of his or her own, the amount of that income is deducted from the community spouse's monthly income allowance.
That quote did not come from www.elderlawanswers.com
Elderlawanswers uses the actual legal terms.
There's no such thing as a "community spouse's monthly income allowance".
But, that's besides the fact.
I say that Medicaid does NOT put any limit on the income for the community spouse.
What say you?
Last edited by Never_a_dull_moment : 04-20-2009 at 08:44 PM.
That quote did not come from www.elderlawanswers.com
Elderlawanswers uses the actual legal terms.
There's no such thing as a "community spouse's monthly income allowance".
But, that's besides the fact.
I say that Medicaid does NOT put any limit on the income for the community spouse.
What say you?
You do realize that I am talking about "income" that has been generated as a result of annuitizing one's "countable assets"?
I never said that the post-DRA "half a loaf" strategy was nullified. If you think I said that, please point out the post.
What I did say was that the pre-DRA "half a loaf strategy" was nullified by the DRA. And it has been nullified by the DRA.
There is a strategy that was developed AFTER the DRA, called a "reverse half a loaf strategy". It is much more difficult to qualify for and it is much riskier than the pre-DRA "half a loaf strategy".
This post-DRA "half a loaf strategy" is NOT available in all states. You said that an attorney in AR says it works in AR. But, it does not work in all states.
Whenever you get time, please explain how Medicaid limits the income of the community spouse. Obviously, I don't understand. And, I'm sure that other people on this forum would love for you to explain it.
I never said that the post-DRA "half a loaf" strategy was nullified. If you think I said that, please point out the post.
What I did say was that the pre-DRA "half a loaf strategy" was nullified by the DRA. And it has been nullified by the DRA.
There is a strategy that was developed AFTER the DRA, called a "reverse half a loaf strategy". It is much more difficult to qualify for and it is much riskier than the pre-DRA "half a loaf strategy".
This post-DRA "half a loaf strategy" is NOT available in all states. You said that an attorney in AR says it works in AR. But, it does not work in all states.
Whenever you get time, please explain how Medicaid limits the income of the community spouse. Obviously, I don't understand. And, I'm sure that other people on this forum would love for you to explain it.
I am assuming no discount!!!!!!
You stated the income is uncapped and untouched. This is not always the case! As you can see I am playing devil's advocate.
If the community spouse were to purchase a SPIA and annuitize(create an income) with all liquid "countable assets"; then in fact a portion of the community spouses income would have to be used to pay for the institutionalized spouse in the form of a penalty. Assuming the portion annuitized is more than $109,560.00 and was done post-DRA.
I like the debate; I appreciate it!
Last edited by insuranceexec : 04-20-2009 at 11:07 PM.
Originally Posted by insuranceexec
If the community spouse were to purchase a SPIA and annuitize(create an income) with all liquid "countable assets"; then in fact a portion of the community spouses income would have to be used to pay for the institutionalized spouse in the form of a penalty. Assuming the portion annuitized is more than $109,560.00 and was done post-DRA.
Is there a reason why you didn't tell Golfnut about this penalty 38 posts ago?
Last edited by Never_a_dull_moment : 04-21-2009 at 12:12 AM.
What Companies offer annuities that meet the Medicare requirements? I see several lawyers that are using this as an opportunity to sell annuties themselves.
I vaguely remember someone saying North American had some good ones that were Medicare compliant.
Those of you who are new and are following this thread...It is about Medicaid Compliant Annuities, NOT Medicare.
Because of the rules it is not possible to shelter money in an annuity once you reach a certain threshold. It has to be taken out in an income stream based on life expectancy and there are spousal income limitations, so... someone who is older and has $800k and annuitizes the money into an income stream for the non institutionalized spouse will still end up paying for the institutionalized spouse's LTC in most situations.
Most of us avoid this stuff. If an elder law attorney or an accountant recommends a client buy one of these, most of us are not qualified or licensed to give advice contradictory to the recommendation. You sell the annuity, have the client sign some kind of disclaimer and move on...
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Chuck
If you think your boss is stupid, remember: you wouldn't have a job if he was any smarter.”
I did meet with the Client. He is under the assumption, via advice from an elder law attorney, that he can annuitize his money and avoid the income as a countable asset. I did advise him I would require a signed statement that he was purchasing the annuities on the advice of an attorney, he has agreed. I am writing the deal up next week.
I did meet with the Client. He is under the assumption, via advice from an elder law attorney, that he can annuitize his money and avoid the income as a countable asset. I did advise him I would require a signed statement that he was purchasing the annuities on the advice of an attorney, he has agreed. I am writing the deal up next week.
When he gets the check this time next year from the insurance company for his first $160,000 "income payment", what is he going to do with it?
The attorney is correct in saying that the income of the community spouse is exempt. And there is no limit on the amount of income the community spouse can have?
But if he deposits that check somewhere, won't it, at that point, become an asset?
And, if it is an asset at that point, then isn't it above the $109k limit for the CSRA? If so, about half of it (about $80K) would have to be spent on her care before she could re-qualify for Medicaid.
There's no way an elder law attorney is that stupid.
I've seen attorneys who are not "elder law" attorneys make dumb decisions like this. I had one tell me one time to immediately transfer the title of the house to the daughters after a relative had a stroke. He did not realize that such a transfer would have cost them about $100k in capital gains taxes PLUS it would have PREVENTED the relative from qualifying for Medicaid for about 8 years.
This poor old man is getting advice from a "general practice" attorney who does NOT understand Medicaid.
Think about it. This "attorney" is recommending that he withdraw $800K from some account. After withdrawing the money, buying the $800K 5-year period certain SPIA, he walks down to the Medicaid office and applies for his wife to get Medicaid.
Ofcourse, Medicaid will ask for all their financial information. Medicaid will see that he had $800K a few weeks before and now that $800K is gone. They'll need to see a copy of the annuity contract. They'll see that it does meet the DRA requirements.
But, all the worker has to do is make a little note to follow up the day after the first annual payment. On that day, the CSRA will be above $109k, and the wife will automatically be disqualified for Medicaid.
Golfnut is neither an attorney, accountant, or Medicaid Case Worker. He is doing the right thing. As an agent he could be held liable for NOT abiding by his clients wishes and the attorney advice.
As I understand the rules you are not wrong Never-dull, but golfnut has done is due diligence, and is abiding by the clients wishes and the attorney advice.
Hey, What else can I do? walk away from the deal? NO way! I hear your logic Never and I agree. I appreciate all the feedback as I was not aware of the rules myself. I did email links outlining the rules to this Client advised him in writng(email) and by telephone and in person. He is satisfied that the attorney is giving him sound counsel and the attorney is providing him with an opinion letter on his case. So, I have done my part,letting him know I do not agree with the advice he is recieving. This client was reffered to me by a very good client and I feel the obligation to do this deal from that angle. I have consulted with my attorney and feel that I am in the clear on the matter. Furthermore, the only son was in on my meeting with the father and he is aware of the situation. I am glad I brought up this issue on the forum as it has made for a livley discussion and made more of us aware of the rules. I also hope that my response and handling of this matter is what any good agent would do... ask questions, get answers, advise my client of what I think is right, etc.
Hey, What else can I do? walk away from the deal? NO way! I hear your logic Never and I agree. I appreciate all the feedback as I was not aware of the rules myself. I did email links outlining the rules to this Client advised him in writng(email) and by telephone and in person. He is satisfied that the attorney is giving him sound counsel and the attorney is providing him with an opinion letter on his case. So, I have done my part,letting him know I do not agree with the advice he is recieving. This client was reffered to me by a very good client and I feel the obligation to do this deal from that angle. I have consulted with my attorney and feel that I am in the clear on the matter. Furthermore, the only son was in on my meeting with the father and he is aware of the situation. I am glad I brought up this issue on the forum as it has made for a livley discussion and made more of us aware of the rules. I also hope that my response and handling of this matter is what any good agent would do... ask questions, get answers, advise my client of what I think is right, etc.
I would not walk away from this case. As Patch has said, you are not the attorney, therefore can not be held liable for his advice.
I would recommend having the attorney draw up a letter explaining and outlining your involvement with this particular case, and have the client sign it.
I would also involve the children, if possible, and have them sign something to the same effect. This will do nothing but help safeguard against any future litigation.
Great topic; thanks for posting, and I hope you get the account.
Re: Medicare Compliant Annuities
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