Great News for Seniors to Protect Assets
It is now official in Connecticut, that if your husband or wife needs nursing home care, you can protect not only the family house, plus about $110,000, but also a significant amount above the $110,000 by buying an immediate annuity with special conditions. This came about on August 11, 2010 in a Federal Court decision, Lopes v Starkowski. The State of Connecticut has decided to appeal the decision, so there is some degree of uncertainty. But if successful, all Connecticut residents, in a husband and wife situation, could keep extra assets, above and beyond the $110,000 previously allowed.
Here is how it works. If your spouse is in a nursing home, or requires care at home, and needs Medicaid (Title 19) to pay for those services, the general rule is that the healthy spouse can keep the following assets: family home, car, $109,560, prepaid funeral contracts, and personal property. The new rule also allows the healthy spouse, in most circumstances, to take money that exceeds the $109,560, and buy an immediate annuity, thereby converting the money into an income stream, which is no longer counted as an asset. This is great news for seniors, because it means the healthy spouse will not be impoverished, and can keep substantially more funds to live on for the rest of his or her life.
It does come with a downside, however, because the healthy spouse must name the State of Connecticut as the primary beneficiary of the annuity, in case the healthy spouse dies before the sick spouse. In addition, there are other technical requirements that must be met, or the assets will not be protected. If you are faced with the need for care for your husband or wife, or if your parents are facing that need, it is imperative that you seek the advice of a knowledgeable elder law attorney who can evaluate your assets, plan the most beneficial way to proceed, and protect the maximum assets possible. And while it is prudent to plan ahead, this new case allows last minute planning to succeed in many situations.
There are also other planning techniques, to complement this special immediate annuity, and those should also be evaluated with competent counsel. To fall back on an old phrase, it’s better late than never. It’s fortunate to have good news to report.