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By Michael T. Lahti
A new bill has been put forth in Congress that would modify the way a “healthy” spouse’s income from an annuity would be treated when a “sick” spouse is in a nursing home. Specifically, the proposed change would require part of the income to be available to the spouse in a nursing home (where it would need to be spent on care).
This would have a far-reaching impact on the strategies planners use when one spouse enters a nursing home and excess assets are being spent down to qualify for care. H.R. 1771 was introduced in April by Rep. Markwayne Mullin (R-Okla.), and provides that if an annuity is paying only to the healthy (at home) spouse, then one-half of the income will be deemed available to the spouse in the nursing home.