The customer invested in a ROTH IRA while he was working.
It was converted to an irrevocable annuity when he retired in August and named AHCCCS as the beneficiary.
Since the annuity meets the conditions of naming AHCCCS as the primary beneficiary and was created using funds in a ROTH IRA, the annuity is considered a compensated transfer.
The community spouse used $126,500 of the couple’s resources to purchase a 9-year period-certain immediate annuity from a life insurance company. The community spouse is the annuitant. The annuity names AHCCCS as the beneficiary in the position after the institutionalized spouse.
The community spouse was 74-years-old on the date the annuity was purchased and according to the SSA Period Life Table had a life expectancy of 9.75 years or 117 months.
The annuity will issue regular monthly checks of $1,488.75 for a set period of 9 years or 108 total months. The insurance company will pay out a total of $160,785.00 over the period of the annuity contract.
Since the annuity meets all of the following requirements, it is a compensated transfer:
· Names AHCCCS as the beneficiary;
· Purchased from a life insurance company;
· Issuing regular monthly payments; and
· Will provide for full return of principal and interest during the community spouse’s life expectancy.