Annuities and uncompensated transfers for LTC

The only annuities subject to LTC transfer rules are those established after April 1, 2009, under WAC 182-516-0201 .

The entire purchase price of an annuity is uncompensated when the annuity:

Fails to name the state of Washington as remainder beneficiary, either in the first position, or second position as described under WAC 182-516-0201 (6).

Is not an annuity described under WAC 182-516-0201 (3)(b), and ANY condition below is not met. The annuity must be: Issued by an entity licensed and approved to issue annuities in the jurisdiction in which the annuity is established. Immediate. Irrevocable. Nonassignable. Not deferred. Paid out in equal periodic payments. Actuarially sound (the annuity must pay out within the annuitant’s life expectancy).

An annuity can be both a resource and an uncompensated transfer.

If a penalty will be applied, recall that it can only start once the client is otherwise eligible for LTC under WAC 182-513-1363 (7)(a). An annuity counting as a resource may make an applicant resource ineligible for LTC.

Example #4

Same example as above, except Joan named Steve as residual beneficiary, and the annuity was purchased within 5 years of Steve’s COPES application. The entire purchase price of the annuity is an uncompensated transfer because Washington is not named as residual beneficiary in the first position.

Example #5

Joanna is applying for COPES. On April 25th, Joanna’s spouse, Charlie, purchased an annuity with $100,000 (Charlie is the annuitant). Charlie’s life expectancy is 7 years, and the annuity pays out over 10 years. The entire purchase price of the annuity is an uncompensated transfer because the annuity pays out beyond the annuitant’s life expectancy.