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EXAMPLE
Joey is 35 years old, married with 2 children. He was in an accident and is now in need of personal care during the day when his wife works. Joey received a settlement on his accident in May 2001 and put the money into an annuity to pay out $15,000 each May for the next 10 years to help the family maintain their living circumstances. Now, in July 2001 the first annual distribution is gone (used up in May on bills) and we have an application for COPES. Here are some possible scenarios:
- The annuity is revocable. It is an available resource and we count it as such.
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The annuity is irrevocable. Joey gives us a statement that we can budget the distributions as if they are equal monthly amounts. We count the distribution as $1250/month unearned income.
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The annuity is irrevocable and Joey said he cannot have the terms changed. He refuses to allow us to budget as if it were equal monthly distributions. We consider that Joey transferred his money into an annuity without adequate consideration and the annuity is an available resource.
The possibility of transfer of asset penalty for the $15,000 distribution from May must be considered if the resource levels are met. For example, if this was the last year of the annuity and the remaining funds are below the resource level, was the $15,000 received 2 months prior given or traded away without adequate consideration?
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The annuity names Joey and his brother as joint owners. Joey’s brother refuses to allow the annuity to be cashed out. This now becomes an unavailable resource. We still consider the $15,000 distribution as income the month they receive it, a resource if it is still available the next month, and if they gave adequate consideration in their use of the money.
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The annuity names Joey and his wife as joint owners. Joey’s wife states she will not allow the annuity to be cashed out. Since the joint owner is the spouse, the cash surrender value of the annuity is an available resource.
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The annuity is to pay out yearly over the next 45 years. Joey’s life expectancy is 39.52 years per the social security actuarial Life Expectancy tables . There will be a period of ineligibility if Joey is receiving LTC services. His application will be denied if he is applying for other medical benefits due to the transfer of resources without adequate consideration.
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