Planning Scenario #2

LTC  Planning for couples may have unique variables to consider, particularly those in a second marriage.   One factor to consider is that without proper planning, one of the individuals has a high likelihood of becoming a caregiver and/or will survive the spouse who requires care.   A second factor may be that one of the individuals may want certain assets to pass on to specific heirs.   Here are the planning assumptions for Nick & Nancy:

- Both are age 65, recently married (2nd marriage each), have individual assets, and plan to retire this year.

- They would “pay for care” with $200,000 in Nancy's existing annuity, which has a $100,000 cost basis, or the amount that she originally deposited into the annuity.

- They are concerned about becoming a burden on one another and their families.

- They were unaware of the Pension Protection Act or PPA and how to leverage it and potentially turn Nancy's single-life annuity into a joint-life LTC Plan.

Net Cost = No Additional Plan Cost

If you own an annuity like Nancy and Nick, which LTC Planning option would you select to maximize the existing annuity?