Medicaid planning: The role of Medicaid-compliant annuities

By Roccy Defrancesco

The Wealth Preservation Institute


As our society ages and as there are millions of people turning 65 every year who will need help paying for their long term care expenses, the need for advisors who can provide clients with Medicaid planning continues to grow.

What is MP? It’s helping senior clients shift/shield assets from the brutal Medicaid spend down and recovery rules. Most advisors and their clients have no idea that singles have to spend their countable assets down to $2,000 in order to qualify for financial assistance through Medicaid.

Unfortunately, there are thousands of advisors giving advice to clients who are age 65 and older who not only don’t know a lot about MP, but literally know nothing about the subject matter. The consequence of this is that many clients are going to receive advice that will prevent them from qualifying for Medicaid for up to five years. For many clients, this could create a total penalty in excess of $360,000.

Because Medicaid-compliant annuities can help clients shift assets without penalty, they are a primary tool when helping clients qualify for Medicaid.

What is a Medicaid-compliant annuity?

Medicaid-compliant annuities have the following attributes:
  • Irrevocable: the income stream cannot be changed
  • Non-commutable: the payments are converted into a lump-sum payment
  • Non-assignable
  • Actuarially sound: the payment cannot exceed the annuitant’s life expectancy
Should you learn about Medicaid annuities?

You should learn more if you are giving financial or estate planning advice to seniors age 65 and older or if you are selling them any kind of non-Medicaid compliant annuity.

Additionally, learning Medicaid planning at a time when millions of people will be turning 65 each year the next many years will help advisors diversify their own business into a separate and what can be a very profitable area of Medicaid planning.

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