How Can An Annuity Protect Your Assets From New Jersey Medicaid Laws?

HNWElder Law, Medicaid Eligibility and Asset Protection Planning

By Fredrick P. Niemann, Esq. a New Jersey Medicaid Attorney

Medicaid AnnuityAnnuities are really confusing.  But in today’s medical world, you may hear that annuities can be “Medicaid friendly.” What exactly is a “Medicaid friendly annuity”?  Simply stated, they are funds converted into an annuity that Medicaid treats as an exempt resource and only as income which allows for (sometimes) immediate Medicaid approval for nursing home, assisted living and home based care.  Under New Jersey law, a traditional commercial annuity does nothing to protect assets from the cost of long term care.  In fact, without careful planning, simply investing in an annuity will result in the unnecessary loss of assets and a denial of Medicaid benefits. Understanding why this is requires some understanding of estate planning, elder law, and annuities. By taking the time to understand annuities you can easily save tens if not hundreds of thousands of dollars. Planning for disability will greatly increase the likelihood of having something to pass on to heirs, while at the same time reducing stress and maximizing one’ own independence.

What is a Commercial Annuity?

Annuities can be either assets or income streams. Alone that doesn’t mean much.  Stay with me.  When initially purchased, most annuities are like certificates of deposit with a longer term and a greater penalty for early withdrawal. Such annuities are assets and are said to be “deferred “or immediate.  An immediate annuity means money can be taken out right away.  Deferred annuities do not pay out interest right away.

I continue our discussion on annuities in a future post(s).

Contact me personally today to discuss your New Jersey Medicaid matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at


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