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4.7.11 ANNUITIES

It is divestment if an institutionalized person transfers

assets or income Income is anything you receive in cash or in kind that you can use to meet your needs for food, clothing, and shelter. to an annuity (4.5.7.4) when any of the following conditions exist:

 

  1. S/he chooses a settlement option that has a pay-out schedule extending beyond his/her life expectancy.

 

The divested amount is the total of all payments scheduled after the month in which the person's age exceeds his/her life expectancy.

 

Determine the person's life expectancy as follows:

 

  1. Find his/her age on the date s/he chose the settlement option.
     

  2. Consult 8.1.10 for his/her life expectancy.

 

Example:  A 76-year-old man purchases an annuity and chooses a settlement option on January 1, 1994.  The annuity will make $100 payments to him beginning January 1, 1994 and ending December 31, 2010.  His life expectancy is age 86.  He will turn 87 on December 1, 2004.  Total the payments from January 1, 2005 through December 31, 2010.  The total is the divested amount.

 

The life expectancy value can be adjusted based on a medical condition diagnosed by a physician before the person transferred funds to the annuity or trust.

 

  1. S/he purchases an annuity that has no cash or surrender value, and s/he does not choose a settlement option.

 

The divested amount is the amount the institutionalized person paid for the annuity.  (If there is a cash or surrender value, count it as an available asset.)

 

  1. S/he purchases an annuity in which neither s/he nor his/her spouse nor a blind or permanently disabled child of any age of either spouse is named the annuitant.

 

  1. S/he purchases an annuity in which there are not fixed, periodic payments   made within his/her life expectancy.

 

 

This page last updated in Release Number : 02-01

Release Date :01-01-02

Effective Date :01-01-02