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Please note that there are those who misconstrue the Deficit Reduction Act of 2005 (DRA) to prohibit the placement of the periodic payments from structured settlement annuities into supplemental/special needs trusts. There is an annuity provision in the DRA in which the ownership annuities have an impact upon Medicaid eligibility. However, those annuity provisions have no relevance to supplemental needs trusts.
The DRA provisions are intended to close a loophole that has been used in Medicaid planning and divestment of assets by the elderly. Those provisions apply solely to the purchase of annuities by the Medicaid applicant. However, structured settlement annuities are not purchased by the Medicaid applicant, nor are the annuities owned by the Medicaid applicant. The only ownership right to the structured settlement annuity is the right to receive the periodic annuity payments. Therefore, the annuity provisions in the DRA are irrelevant to structured settlement annuities. Furthermore, it was after the DRA that CMS (The Centers for Medicaid and Medicare) wrote to Jay J. Sangerman, Esq. that the irrevocable payment of the periodic payments from structured settlement annuities into supplemental needs trusts have no impact upon Medicaid eligibility.
Jay J. Sangerman, PLLC
60 East 42nd Street - Suite 2218
New York, New York 10165
Telephone (212) 922-0711
Facsimile (212) 922-0709
jsangerman@sangerman.com
4115 NW 60th Circle
Boca Raton, Florida 33496
561-989-9095
Jay J. Sangerman & Associates
Lanidex Executive Center
100 Misty Lane
Parsippany, New Jersey 07054
(973) 739-9055