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  • Amber Hinds

Types of Assets that Can Be Used to Purchase a Medicaid Compliant Annuity


People often ask what type of assets/account can be used to purchase a Medicaid Compliant Annuity (MCA)? The simple answer is ANY! If you are working with a client who has any of the following accounts that need to be converted into a non-countable/exempt asset, we can help as any of the following accounts can be used to purchase a MCA:

• Checking Accounts

• Savings Accounts

• Certificates of Deposit

• Brokerage Accounts

• Stocks

• Bonds

• Permanent Life Insurance policies (whole life, universal, etc.), not term policies

• Non-Qualified Annuities

• IRAs/Retirement Accounts

Most of the account types listed above are pretty straight-forward as far as the client writing a check or wiring the funds to purchase a MCA. However, if you have clients who have existing stocks, bonds, mutual funds, etc., these accounts will need to be liquidated to a cash position before using them to purchase a MCA. In other words, we cannot do an “in kind” transfer of a specific stock to purchase the MCA. The stocks will need to be liquid before sending to the insurance company issuing the MCA.

Additionally, if your clients own existing permanent life insurance policies (policies with cash value) or non-qualified annuities that have substantial gain/deferred interest, we can initiate a 1035 tax-free exchange to purchase a MCA. In order to initiate a 1035 exchange, your client would complete transfer forms with the MCA application allowing the insurance company issuing the MCA to obtain the money directly from the current life insurance or annuity carrier.

Furthermore, if your clients own IRAs or pre-tax retirement accounts that are countable in your state for Medicaid planning purposes, we can use a trustee-to-trustee transfer or a 60-day rollover to purchase a MCA.

At AshBer, we specialize in Medicaid Compliant Annuities to help pay for long-term care services.We would love to help you solve your clients’ long-term care needs. Contact our office today at (888) 441.1595.

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