In the case of Geston v. Olson, the U.S. District Court of North Dakota has found that state law that sets limits in regards to the amount of income that can be gained from permissible annuities is more restrictive than the federal law. Therefore, the law is invalid.
Prior to applying for Medicaid benefits, John Geston's wife purchased an annuity to provide additional monthly income to help cover costs as John was set to go into nursing care. This purchases still kept their income below North Dakota's limit and should have still allowed them to use Medicaid benefits to pay for his care. However, the state denied the application and treated the annuity as a countable asset. So, they filed suit in federal court.
In addition to the court finding that the North Dakota law violated the federal Medicaid statute limiting income, they also found that it violates a section of federal law that prohibits even the consideration of a community spouse's income when determining an institutionalized spouse's Medicaid eligibility.
If you have questions about how annuities can be a part of your estate litigation and how they might effect your California Medicaid eligibility please contact a professional estate litigation Attorney.
*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.