13 Apr What is a Medicaid-compliant annuity?

Q. What is a Medicaid-compliant annuity and who can benefit from one?
— Learning

A. Sure thing.

A Medicaid-compliant annuity is a single premium immediate annuity that helps accelerate Medicaid eligibility, said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.

He said the annuity is irrevocable, non-assignable and provides monthly income benefits for a specific period of time.

The state’s Medicaid agency would need to be named as the primary death beneficiary in most cases, Lynch said.

“This works well for someone residing in a nursing home who is self-paying for care,” he said.

But before you purchase any product like this, you need to speak to a good estate attorney, Lynch said.

“A good estate attorney is not any attorney that can sell you a will,” he said. “It is someone who generally specializes in elder care, estate and tax planning law.”

Because these can be complicated products with many consequences, be sure to really understand your options before you buy.

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