Medicaid planning in Texas may involve a considerable number of moving parts. This is no small part because people are living longer. As they do so, they will also require increased care. Figuring out the level of coverage you will need is a highly complex matter. The time to seek expert help to do so is now.
What are the benefits of an MCA?
A successful course of Medicaid planning may require the elimination of a previously countable IRA. You can transfer this account to a Medicaid-compliant annuity (MCA). This is a type of Single Premium Immediate Annuity (SPIA) that you can use to convert your leftover assets into a cash stream. This stream will feature zero cash value.
The MCA is an extremely versatile tool that you can use during crisis planning. It will help you to quickly and efficiently spend down all of your excess countable resources. An MCA also allows you to meet all of the prerequisites to be eligible for this level of care. This is because it is non-assignable and irrevocable.
You must usually name your state Medicaid agency as your primary beneficiary. It will also need to make equal payments every month. Very few exceptions to this rule are permitted. Some of these may involve a married couple or a disabled child. In this case, the state must be named as a contingent beneficiary.
Can an MCA help protect your estate
Transferring your IRA assets may be an essential part of your concurrent estate planning. Doing so can help you avoid a wide range of tax consequences that can come immediately after liquidating your IRA. Transferring to an MCA will help spread these consequences over the entire term of the annuity.
You will be taxed in a series of much more reasonable payments made each calendar year. You can schedule the transfer of your IRA to an MCA with a 60-day rollover or a trustee-to-trustee transfer.
