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  • Writer's pictureKathy L. McNair, Esq.

New SJC Case Impacts Spousal Annuities for MassHealth

On January 27th, 2023, the Supreme Judicial Court of Massachusetts decided a case, EOHHS v. Mondor, that impacts annuities purchased by spouses to protect assets from MassHealth (also known as Medicaid) benefits.

This case answers the question of whether MassHealth can take the money remaining in an immediate annuity, if the spouse of the MassHealth recipient dies within the term of the annuity. The court ruled that MassHealth is entitled to this money, as the annuity was intended for the "sole benefit" of the spouse. The court decided that when the spouse dies within the annuity term, MassHealth should be entitled to any remaining annuity funds, to the extent it paid for MassHealth benefits for either spouse, not just the spouse who purchased the annuity. Essentially, this means that if the spouse at home dies during the annuity term, rather than having the children or named successor beneficiaries receive this money, the Commonwealth of Massachusetts will receive this money to the extent they paid for MassHealth benefits.

Up until this case, it was unclear whether MassHealth could claim the remaining funds in the annuity for the nursing home spouse's care. Here are the five main points that you need to know about this case and how it could affect you:

  1. If you purchased an immediate annuity so that your spouse would qualify for MassHealth benefits, and you die within the term of the annuity, the remaining funds in the annuity must first be paid to MassHealth to pay for your spouse's care.

  2. As long as the spouse still living in the community, who purchased the annuity does not die during the term of the annuity, then this case will have no impact. For example, if you purchase an immediate annuity with a five year term, and you are still alive at the end of the five year term, you will receive all of the payments on this annuity. MassHealth won't be able to recover any money because the money will already have been paid out in full to the spouse living at home. The bottom line is that you should try your best not to die during the term of the annuity.

  3. If you are purchasing an immediate annuity with the intent of reducing assets so that your spouse may qualify for MassHealth benefits, you should purchase the annuity for the shortest term possible.

  4. If your life expectancy is very short and your spouse needs MassHealth benefits, purchasing an annuity may not be the best option for you. You may have better options.

  5. For most people, Immediate annuities are still a good way to protect assets if your spouse needs nursing home care. However, you need to make sure that you get the right annuity and the right advice.

if you are concerned about the high cost of nursing home care, it is more important than ever to consult with an elder law attorney. Please take the first step and contact us now to schedule a free consultation. We are here to help guide you and protect your assets. You may contact us by calling our office at 617-489-5900 or schedule a brief free consultation by clicking on this link:

Senior Solutions, Attorneys at Law, is an Estate Planning and Elder Law firm, serving the Greater Boston, Massachusetts area, since 2001. We are ready to help you with Medicaid Planning, Estate Planning, Probate, Guardianship & Conservatorships, Special Needs Trusts, and Fiduciary Services.

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