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Author Topic: Annuity in Revocable Trust  (Read 3286 times)


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Annuity in Revocable Trust
« on: April 01, 2011, 02:48:27 PM »

We are beginning the application process for the A&A pension for my mother in law -- spouse of deceased WWII veteran. They set up a revocable trust several years before my father in law's death. There is an annuity in the trust, it has lots of penalties for withdrawal before her death. Does that get counted as an asset in the application process? Do we have to declare it? I am being told that the trust needs to be changed to a irrevocable trust. I am concerned that the person is just looking for fees for drawing up the new trust.

She is 93 and not really able to handle her own financial business. And we very recently had to move her from living with us in our home into an adult residential care facility. Other than the annuity, she has resources (along with her SS) to go about 1.5 years in the current situation.

I would really appreciate any help and perspective that is out there,


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Re: Annuity in Revocable Trust
« Reply #1 on: April 01, 2011, 04:26:50 PM »

This may be a question you need to speak with an Elder Law Attorney about due to the legal issue; however see the listing below to help you arrive at what her countable income is.

I hope this helps.

The VA suggests that its adjudicators use a certain amount of personal
judgment on this issue. But the bottom line is: does it realistically appear
that the veteran or surviving spouse may outlive their assets? If so, they
are likely eligible.

Do NOT count their residence or vehicle when estimating net worth.

Do NOT count a life insurance policy (because the policy holder must be
deceased in order to benefit from it).

DO count CDs, annuities, stocks, bonds, savings, checking, IRAs, Keogh, etc.

DO count any assets owned by the spouse as well.

As a rule of thumb, assets should not exceed $80,000. That amount drops
depending on the age of claimant.

List below the estimated ANNUAL income of the veteran or surviving spouse:

Estimate total income (If married include spousal income): ______

All income must be included. This includes social security, pension,
interest income, dividends, income from rental property, etc.

If the veteran is married, then any spousal income must also be included.

List all unreimbursed, recurring health care expenses:

This includes:

Assisted Living costs (per month): _________________

Nursing Home costs (per month):________________

Home Care service (per month):_______________

Health Insurance premium (per month):_______________

Medicare premium (per month):_________________

Regular (unreimbursed) prescriptions
(per month & verifiable through a pharmacy print-out): _____________

TOTAL Expenses per month: __________
(multiply x 12 to get total annual expenses)

Subtract your total annual health care expenses from your total annual
income and write the amount here: _____________. This is your "countable"


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Re: Annuity in Revocable Trust
« Reply #2 on: April 05, 2011, 09:49:47 PM »

As a more defined example for you, VA considers both the value of the asset and the availability of it. You should report the asset with the information you just mentioned (i.e. the surrender value, the penalties, etc) and VA will consider the fact that the cash value of the annuity is not immediately available.
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