Question

Medicaid Preparations

Forum|Forum|3 years ago
January 23, 2023
1 reply
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my wife is preparing her mother for Medicaid and had to cash out a pre-taxed annuity to pay for assisted living until Medicaid is approved. The check was made out in my wife's name and she will deposit the check for paying the necessary costs in her mom's credit union account. If the annuity is pre-taxed will this check amount be considered as income against our personal taxes even if it is solely for her mother's bills.

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xmasbaby0

Employee

You say that the money from the annuity went into the mother's account, right? And the funds are coming out of that account to pay for mom's care? You do need clear records for Medicaid, but sounds like you should be okay as long as it is clear what happened with mom's money. There is a five year lookback with Medicaid--you want to avoid any appearance of giving away any of her money to family members, etc. Keep very careful written records of all bills paid to the nursing home. They made the check payable to your wife-----you want to make sure the 1099R issued is in mom's name--not your wife's name.

If you have any concerns---and there may be some when you are anticipating going on Medicaid----look into advice from an elder law attorney. In many areas there are elder law practices that will provide at least one session of free advice to seniors.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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xmasbaby0

Employee

@rlpowers4834 And......that annuity WAS the mom's annuity, right? Not your wife's? Do not want to assume anything. If the annuity that was cashed in was your wife's then it has to be entered on your joint tax return no matter what you used the money for. There will be a 1099R for it.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**