State of Wisconsin “Name on the Check Rule” Decision
POSTED ON - April 11, 2018
Written By Krause Financial Services
In this case, the court needed to decide if income from an annuity can be counted towards the institutionalized spouse’s income (Petitioner) or can it can be excluded since the payment is in the Petitioner’s wife’s name alone?
The Petitioner resided in a nursing home and applied for Medicaid benefits. He was approved for benefits backdated to March 1. He also executed a Power of Attorney two years prior to applying for Medicaid that gave his wife and three of his children power of attorney. Then the petitioner, or someone acting on his behalf, used his IRA funds to purchase an annuity on March 31, after he had been approved to receive Medicaid benefits. The Petitioner became the owner and annuitant of the annuity but his spouse was designated the payee.
The main issue is whether the money from the annuity should count as income for the Petitioner. In a previous court case, the Division of Hearings and Appeals “concluded that income in the name of a community spouse could not be deemed to the institutionalized spouse as the Wisconsin’s Administrative Code, at § HFS 103.075(6)(a)3, prohibited such attribution.”
However, the agency argued that “the Petitioner by himself or via the power given to his community spouse as POA can make the annuity payment available for the Petitioner.” But the agency did not show that the Petitioner could any longer make the income available to himself. Thus, the court was left to the law that “payment of income to one spouse is not considered available to the other.”
The court ruled that the annuity payment should not be deemed as Petitioner’s income.
The full document text can be found here.