Wyomissing, PA -- (SBWire) -- 12/14/2015 --A recent decision by the United States Court of Appeals for the Third Circuit has made it easier for Medicaid applicants in Pennsylvania to structure their Medicaid spend downs for quicker eligibility for Medicaid while providing the added benefit of short-term financial security for community spouses in the form of short-term annuities. In the case of Zahner v. Pennsylvania Department of Human Services (DHS), the Third Circuit rejected DHS's treatment of the purchase of short-term annuities as disqualifying "transfers for less than fair market value." DHS had long considered the purchase of a short-term annuity to be a "sham transaction" entered into solely for the purpose of sheltering assets for Medicaid eligibility.

But after reviewing the economics of Medicaid qualifying short-term annuities, the Third Circuit held that the only durational restrictions placed on Medicaid qualifying annuities are (1) that they need to pay out during the life expectancy of the community spouse, and (2) that the annuity contract must name Pennsylvania as the remainder beneficiary following the death of the annuitant spouse. This change in the treatment of short-term annuities permits the conversion of an otherwise countable resource into a source of income that can be applied towards meeting the daily expenses of the community spouse.

As an added benefit, such a purchase would not be considered a transfer for less than fair market value and cause the applicant to incur a penalty period of Medicaid ineligibility. Applicants who fear that their spouses will struggle to pay their bills while the applicants are receiving care in a nursing facility may find that short-term annuities can serve as beneficial investments as they can provide clear financial benefits for both the Medicaid recipient and the community spouse. As long as the incomes of the applicant and of his or her spouse remain below the applicable limits for the particular Medicaid program under which the applicant is seeking long-term care benefits, individuals might be able to utilize short-term annuities as an effective Medicaid planning strategy.

In order to take advantage of this new Medicaid planning strategy, Medicaid applicants and recipients can turn to Kozloff Stoudt Attorneys and its experienced team of estate planning attorneys in Reading, PA. The lawyers of Kozloff Stoudt Attorneys recognize that this new opportunity in Medicaid planning may cause individuals to need legal assistance in developing and implementing the best possible strategies for Medicaid eligibility.

Kozloff Stoudt Attorneys will prepare individually tailored plans for each nursing home patient. Such plans can provide financial benefits to the patient and his or her family while still ensuring that the patients become eligible for Medical Assistance benefits. Each plan can involve a wide range of strategies carefully selected in light of the applicant's unique financial and medical circumstances. One such strategy might be the purchase of a Medicaid qualifying annuity as previously discussed.

Beyond their experience in developing specially designed Medicaid planning strategies for nursing home patients, Kozloff Stoudt Attorneys in Reading, PA has a dedicated personal injury practice that can help tort victims faced with life-changing disabilities obtain the compensation needed to support their long-term care needs. Those who face financial obstacles or substantial medical needs can put their trust in the law services of the firm of Kozloff Stoudt Attorneys to receive the assistance they need in applying for Medicaid and other long-term care benefits. To consult with an attorney, please call 610-370-6700.

About Kozloff Stoudt Attorneys
The Law Offices of Kozloff Stoudt Attorneys formed in 2000, following the merger of two historically respected and prominent Berks County law firms. The firm is located in the Spring Ridge area of Wyomissing, Berks County, the professional and commercial hub of the Reading area. For years, the lawyers of Kozloff Stoudt Attorneys have advised and represented individuals, businesses, school districts and municipalities in all aspects of civil law.

For more information on Kozloff Stoudt Attorneys, please visit http://www.kozloffstoudt.com.