But there is still much that can go wrong with annuities. That's why they are not always the first tool an elder law attorney reaches for in his arsenal when it comes to sheltering assets for his elderly clients' long-term care needs.
If a client going into assisted living is sold an annuity to qualify for veterans benefits, that product had better be especially flexible. That's because the client may need it to quickly become Medicaid compliant if a nursing home stay later becomes necessary, Krause says.
You don't want your client to be handcuffed, for example, by steep, long-term surrender fees.
Womack warns that a Medicaid annuity might be ineffective in a state that considers not only the value of your assets but also your income to qualify for Medicaid.
Also, an immediate annuity can't be changed by the policyholder. It may not be a client's best option to qualify for Medicaid if he or she wants to leave money for loved ones.