The Annuity Will Turn His Wife’s $190,000 Spend-Down Into Income the Nursing Home Can’t Touch. The Price Will Be One Line Naming the State as Her Beneficiary, and When She Dies at 81, It Will Collect $62,000

Imagine a wife in Florida in her late 70s whose husband just moved into a nursing home. Once Medicaid runs its eligibility math, she’s holding $190,000 more than the couple can keep. One obvious path is to spend that money down before Medicaid begins paying for his care.

Elder law attorneys describe another option. She gives the $190,000 to an insurance company and gets an immediate annuity in return. If the contract follows Florida’s Medicaid rules, the lump sum stops sitting in the asset column and comes back to her as monthly income. That can bring her husband within the asset limit while she keeps the checks. The trade-off is one beneficiary line: Florida gets first claim on what remains after she dies, up to what Medicaid paid for her husband’s care.

Why is she over the limit at all? The community spouse resource allowance (CSRA) protects part of the couple’s savings for the spouse at home. In 2026, the federal maximum is $162,660, and Florida uses that full amount. Her husband can generally keep another $2,000. Anything above those limits has to be dealt with before he qualifies.

How $190,000 of Savings Turns Into Her Monthly Income

Florida puts tight limits around the annuity. It has to fit within the wife’s life expectancy, and she can’t keep $190,000 sitting inside a contract she can simply cash out or sell. Once the money has been properly turned into the annuity, the payments come back to her as income instead of leaving the original lump sum sitting in the couple’s countable savings.

Her income is her own for Medicaid purposes. The nursing home doesn’t get to take her annuity checks simply because her husband lives there, although that new income can change how much of his income Medicaid lets him shift to her each month.

The details change at state lines, which is why this strategy has to be built around the rules where the couple lives. In Florida, getting the contract wrong can turn the purchase into a transfer that delays Medicaid eligibility instead of helping the husband qualify.

One Beneficiary Line Gives Florida a Claim Later

The price shows up in the beneficiary line. For an annuity bought by the Florida spouse at home, the state generally has to be named first to receive what’s left, up to the amount Medicaid paid for her husband. A minor or disabled child can change that order.

She owns the annuity and collects the payments while she’s alive. When she dies, Florida can collect what’s still owed under the contract, up to what Medicaid spent on her husband’s care. Leave the required beneficiary language off, and the purchase can create the very Medicaid transfer problem the annuity was supposed to solve.

She keeps every monthly payment while she lives. The state collects only what’s left on the contract after she dies, which puts its claim last in time.

How a $62,000 Remainder Ends Up With the State

Take an illustrative five-year annuity paying roughly 3.5%. The $190,000 would produce monthly payments of about $3,456. If she dies at 81 with 18 guaranteed payments still coming, roughly $62,000 remains on the contract.

Florida steps in at that point. If Medicaid paid more than $62,000 for her husband’s care, the state takes the full remainder. If Medicaid paid less, it collects what it’s owed and the balance can pass to the next beneficiary.

Now flip the timeline. If she lives through the full term, the payments end on schedule and nothing remains for Florida to collect from the annuity. She received the money herself, one month at a time. The state gets its chance only if qualifying payments are still left when she dies.

Medicaid keeps its interest in the money either way. What the annuity changes is the order: she gets the income first, and the state’s claim reaches only the qualifying payments still left when she dies. For a wife who would otherwise watch $190,000 drain into nursing home bills, that one beneficiary line is a high price, but she knows it up front.

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