What about annuities?
Annuities have long been promoted as a "magic bullet" for Medicaid/nursing home planning. This view is often advanced by sales-driven advisors more intent on gaining a large commission than helping their clients. But, while it is true that you should not assume that an annuity is the magic cure for your nursing home concerns, neither should you assume that they are not useful for the Medicaid planning process. The proper annuity, used in appropriate circumstances is of tremendous value in the nursing home planning process.
The basic idea behind using annuities in Medicaid planning is to convert what otherwise would be considered an at-risk cash asset of the nursing home spouse to an income stream for the community spouse which will be protected from the "spend down" process. Annuities may also be used as a means to "buy" your way through a penalty period imposed on transfers that you made. Like any tool, when used in the proper circumstances they can be indispensable asset protection techniques. The secret is to work with a competent team of advisors, including an estate planning attorney and financial advisor that view your goals, not their commissions, as their primary concern and are willing to work together to develop a customized plan to meet those goals.