New York Estate Planning & Elder Law Blog
NEVER TOO LATE TO SAVE ASSETS
As this blog discussed in the past, the Third Circuit case of Zahner v. Pennsylvania Department of Human Services, which issued a major victory to Medicaid recipients everywhere. While the case is only binding to the states under the jurisdiction of the Third Circuit (New Jersey, Pennsylvania, Delaware and the Virgin Islands) it is the only Circuit Court of Appeals opinion in the nation on the issue of short term annuities in the context of Medicaid eligibility and it is a well reasoned opinion resting on a solid foundation of the facts as they are applied to the law.
With respect to Zahner, the Court held that under Medicaid’s Safe Harbor Provision, a short term annuity that does not, at the time of purchase, extend beyond the anticipated life span of the purchaser does not violate Medicaid’s policy against transferring assets within a set lookback period of time and thus does not disqualify a person from qualifying for Medicaid by their purchase. Many people do this so as to protect the collective assets of a couple when one spouse is about to enter a nursing home, to ensure that the community spouse (the spouse not in the nursing home) has a stream of income.