What Type of Assets Can be Used to Purchase a Medicaid Compliant Annuity (MCA)?
If your clients have money in checking accounts, savings accounts, CDs, brokerage accounts, stocks, bonds, whole life insurance policies, non-qualified annuities or IRAs, any of these accounts may be used to purchase a MCA. Clients who have money is checking or savings accounts, these monies can be used to issue a check or wire funds to the insurance company to purchase a MCA. Clients who have money in CDs, brokerage accounts, stocks, bonds, etc., these accounts will need to be liquidated prior to purchasing the MCA – i.e. convert the accounts to liquid form.
Alternatively, clients who have money in whole life insurance policies or non-qualified annuities, we can initiate a direct transfer of these policies via a 1035 tax-free-exchange into a MCA. Lastly, clients who have money in an IRA or retirement account, we can fund an IRA MCA via a direct transfer from the current custodian to the insurance company issuing the MCA or via a 60-day rollover.
In summary, any type of liquid asset can be used to fund a MCA.