Annuity to Fund a Personal Services Contract

A Secure Solution in PSK Planning

A Personal Services Contract (PSK) is often used as a spend-down tool for Medicaid eligibility, but can sometimes cause non-Medicaid problems. Using an immediate annuity in conjunction with the PSK will allow your client to:

Protect the PSK Funds
Accelerate Medicaid Eligibility
Maintain Peace of Mind

An Annuity to Fund a Personal Services Contract is a Single Premium Immediate Annuity (SPIA) that is revocable. This strategy is commonly used in the state of Florida. The caregiver is the owner and payee of the policy, and the care recipient is the annuitant. In some cases, an insurance company may not allow the owner and annuitant of a contract to be separate individuals. In those situations, the caregiver is also the annuitant of the policy.

 

Using an annuity allows your client to avoid giving a lump sum of cash assets to their caregiver, which would otherwise cause excessive income taxes as well as loss of control over the funds.  With an annuity, the caregiver receives a steady stream of income over the course of the contract.

An Annuity to Fund a Personal Services Contract may be right for your client if they...
Are seeking Medicaid.
Are considering creating a Personal Services Contract.
Are concerned about excessive income taxes.
Are concerned about control of the funds.