However, many counties in Ohio have treated the purchase of these annuities as an improper transfer of resources, and as such, many attorneys, including myself, have been reluctant to implement the use of MCAs in devising planning techniques for clients. This fear was confirmed in a recent Ohio District Court case title Hughes -v- Colbert, where the Court held that an MCA, which met all the required criteria, was a countable asset because it was purchased after the spouse entered the long term care facility. The Court held, in part, as follows:
"... a transfer to a community spouse in excess of the spouse's CSRA is an improper transfer. The court rules that while the Deficit Reduction Act of 2005 allows the purchase of an annuity in certain circumstances, that law applies only to the institutionalized spouse...."
The case is currently on appeal to the United States 6th Circuit Court of Appeals. We are hopeful that the Appeals Court will reverse the decision of the District Court and permit the use of MCAs. We are monitoring the case, and we will alert you when the Court reaches a decision.