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F-420 Division of Welfare and Supportive Services TRANSFER OF ASSETS Medical Assistance Manual ANNUITIES 23 Oct 01 MTL 04/23

Annuity-Related Transactions Other Than Purchases

Transactions that occur on or after February 8, 2006 may make an annuity, including one purchased before that date, subject to the DRA transfer of assets, if the transaction includes:

1. Any action taken by the individual that changes the course of payments, or

2. Any action taken by the individual that changes the treatment of the income, or principal.

For annuities purchased prior to February 8, 2006, routine changes and automatic events that do not require any action or decision after February 8, 2006 are not considered transactions that would subject the annuity to the DRA transfer of asset provisions include:

1. Notice of address change; or

2. Death or divorce of a remainder beneficiary, and other similar circumstance; or

3. Changes that occur based on the terms of the annuity which existed prior to February 8, 2006, and which do not require a decision election or action to take effect. Example: if an annuity purchased in June 2001 included terms that require distribution to begin five years from the date of purchase, and payouts consequently begin, as scheduled, in June 2006, it would not be considered a transaction subject to the DRA transfer provision, since no action was required to initiate the change; or

4. Changes that are beyond the control of the individual, such as a change in law, change in the policies of the issuer, or a change in the terms based on other factors such as the issuer’s economic conditions.

Requirement to Name the State as a Remainder Beneficiary on Annuities

The annuity shall be treated as a transfer of assets for less than fair market value unless the state is named as remainder beneficiary in the first position.

This applies unless there is: