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TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE 23 pay interest to whomever holds the bond. Zero coupon bonds do not pay current interest. The accrued interest is paid at maturity. A government bond, distinct from a U.S. Savings Bond, is a transferable obligation issued or backed by the Federal Government. They include Treasury bills, notes and bonds, and Federal agency securities, such as Federal Home Loan Mortgage Corporation (FREDDIE MAC) and Government National Mortgage Association (GINNIE MAC). Bonds are negotiable and transferable. Their value as a resource is their current market value. The redemption value, which is available only at maturity, is immaterial. The documentation for these bonds is similar to stocks. 20330.9 Uniform Gifts to Minors Act Delaware has adopted the Uniform Gifts to Minors Act (UGMA) which permits making gifts to minors that are free of tax burdens. The UGMA is sometimes called the Uniform Transfers to Minors Act (UTMA). Under Delaware UGMA law: ·An individual may make an irrevocable gift of money or other property to a minor. If such a gift is made, then; ·The gift, plus any earnings it generates, is under the control of a custodian until the child reaches the age of majority established by State law; ·The custodian has discretion to provide to the minor or spend for the minor’s support, maintenance, benefit or education as much of the assets as he/she deems equitable; and ·The child automatically receives control of the assets upon reaching the age of majority (his/her 18th birthday). At this time, the UGMA property becomes a countable asset for the purpose of program eligibility. UGMA property including any additions or earnings is not income to the minor. However, any disbursements from the UGMA account to the minor will be considered income to the minor. Verification DSS will verify all allegations of existence of a UGMA gift by obtaining a copy of the document of ownership (e.g., deed, certificate of deposit, savings account, etc.) or other written document from the issuing source. If there is no document designating a UGMA gift, then the asset will be considered a countable resource. 8 DE Reg. 1712 (06/01/05) 20330.10 Annuities 20330.10.A Defining Annuity For Medicaid purposes, an annuity is a financial device between an individual and a commercial company that conveys a right to receive periodic payments for life or a fixed number of months or years. 20330.10.B Disclosure of Interest in an Annuity 1. Any interest an applicant or community spouse has in a revocable or irrevocable annuity must be disclosed at the time of application. 2. Failure to disclose interest in an annuity may result in denial of payment for long term care services or denial of Medicaid eligibility. 20330.10.C Determining If Annuity is Income and or a Resource 1. The equity value of a revocable annuity is a countable resource. 2. An assignable annuity (the owner or payee may be changed) is a countable resource. The resource value is the amount the assignable annuity can be sold for on the secondary market. 3. An annuity purchased by a third party, e.g. applicant’s employer, as a retirement benefit to the applicant will not be counted as an available resource. (DSSM 20330.4) 4. The stream of income generated by an annuity, whether a countable resource or not, is countable income. 20330.10.D State’s Rights as a Preferred Remainder Beneficiary 1. The DMMA will notify, in writing, the issuer of an annuity owned by an applicant that the State is the preferred remainder beneficiary. This notice will require the issuer to notify the State of any changes in the amount of income, principal or beneficiary to the annuity. This notice will require the issuer to notify the State of any changes in the amount of income, principal or beneficiary to the annuity. 2. Certain transactions that occur on or after February 8, 2006 will subject an annuity purchased prior to this date to the DRA provisions. (DSSM 20330.10.E, DSSM 20330.10.F) These transactions include such things as an addition to the principal, elective withdrawal, requests to change beneficiary, or elections to annuitize the contract.