Spousal Annuities in Medicaid Planning: Latest Case from the Eighth Circuit

In the most recent federal appellate court ruling on spousal annuities as a Medicaid planning tool, the 8th Circuit ruled on September 10, 2013 that under existing Medicaid law, the wife’s irrevocable spousal annuity (purchased before the husband’s application for Medicaid, using $400,000 of the couple’s savings) was not a countable resource, and therefore did not make the applicant-husband ineligible for Medicaid.

The 8th Circuit in Geston v. Anderson cites Lopes v. Department of Social Services, 696 F.3d 180 (2d Cir. 2012) and James v. Richman, 547 F.3d 214 (3d Cir. 2008) as support for the decision that the annuity in question must be treated as the community spouse’s unearned income, and thus exempt from treatment as a resource available to the applicant spouse.  

Hat tip to Robert Clofine, Esq. for latest news.