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Crisis Planning - Actuarially Sound Annuity : Lopes Annuity

John (78) and Sarah (72)



Problem: John has been admitted to the Nursing Home at a cost of $15,000 per month. The concern is to protect Sarah from impoverishment. For John to be approved for Medicaid assistance, Sarah is only allowed to keep $130,380 (in 2021), the home, a car, and funeral policies on each of them. The couple owns a home worth $260,000 (with a $58,000 home equity loan) and savings totaling $586,000.


Solution: Working closely with an Elder Law Attorney, we were able to take

advantage of a little-known strategy that allows for conversion of unprotected

countable assets into a protected income stream for Sarah.


Here’s how it works: First, we spent down assets as follows:

$58,000 - pay off home equity loan

$32,000 - Home Improvements for a new roof and furnace

$37,000 - Purchase a new car for Sarah

$20,000 - Purchase 2 Final Expense Funeral Trusts-$10,000 each

$130,380 - Community Spouse Allowance (2021)

Total = $308,620 – Remaining unprotected assets after Spend-down


Per the 2012 Lopes Case in Connecticut, Sarah then purchased a properly structured annuity* with the remaining $308,620. Rather than having to spend this money on John’s care, Sarah now receives payments of $6460 per month for 4 years (48 payments). She is allowed to reaccumulate her entire $308,620 plus interest, and John is approved for Title 19 Medicaid assistance.


* The annuity must be irrevocable, non-assignable, non-commutable, non-

transferable, actuarially sound, and the State needs to be the beneficiary in the first position.

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