Should You Have a Medicaid-Qualified Annuity for Your Spouse?

Medicaid planning

A Medicaid-qualified annuity is a useful tool for protecting your assets for a spouse when the other spouse is applying for Medicaid. As with all Medicaid planning, it’s best to consult with your elder law attorney in New Jersey to see if it’s right for you.

  • Excess Resources in the Medicaid Application Process

Your estate is made up of a range of assets, all of which will be considered in the Medicaid application process, which covers a lookback period of 5 years from the date of the application. This means that any Medicaid planning strategy has to begin well before any benefits are required.

In order to qualify for Medicaid, you’ll need to be below their threshold, so any assets over this threshold are excessive resources. Essentially, these need to be removed from the household for more than 5 years before you make a Medicaid application. A Medicaid-qualified annuity can do this.

  • What are the Benefits of a Medicaid-Qualified Annuity?

A Medicaid-qualified annuity is a good option for spouses where only one spouse requires Medicaid, as it can be used to provide income for them. Without this type of measure in place, a household’s excess resources would be used for nursing home or long-term care instead.

This annuity is a single premium immediate annuity, which means that you pay in a lump sum (your excess resources) in return for a stream of income in the form of monthly payments until the lump sum runs out.

  • What are the Requirements of a Medicaid-Qualified Annuity?

There are legal requirements that define whether or not an annuity product is Medicaid-qualified. This includes:

  • That it has to be an immediate annuity,
  • That it pays income in equal installments (usually monthly),
  • That it has no balloon payments at the end,
  • That the terms of the annuity do not extend beyond the receiving spouse’s 

life expectancy, and

  • That it is irrevocable and non-assignable.

This means that if the spouse receiving the income dies during the period before the annuity is fully paid out, any remaining money will be used to pay the other’s spouse’s Medicaid bills first before it will go to a beneficiary.

Is This the Right Medicaid Planning Option for You? Speak to an Elder Law Attorney in New Jersey

Frank R. Campisano is a highly experienced and compassionate elder law attorney with considerable knowledge of Medicaid issues. In addition to Medicaid planning, he is also able to assist with applications, appeals, and other Medicaid issues. If you or a family member needs assistance with their Medicaid planning or protecting their assets effectively, don’t hesitate to get help today.

In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Health Care Proxy, Power of Attorney documents, and trusts.

For a free consultation with an NJ elder law specialist for Medicaid assistance, please contact us today, and speak to Frank R. Campisano or visit our website at

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