A. The administration has sole authority to determine the effect of annuities, promissory notes, loan agreements and related financial instruments on a person‘s eligibility pursuant to this article.

Terms Used In Arizona Laws 36-2934.02

  • Administration: means the Arizona health care cost containment system administration. See Arizona Laws 36-2931
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215

B. An irrevocable annuity purchased with an applicant’s assets is treated as a transfer with uncompensated value pursuant to section 36-2934, subsection B unless it meets all of the following:

1. It is purchased from a life insurance company or another commercial company that sells annuities as part of the normal course of business.

2. It provides substantially equal monthly payments of principal and does not have a balloon or deferred payment of interest or principal.

3. It is an annuity currently issuing payments for the person or that person’s spouse.

4. It will return the full principal and interest within the annuitant’s life expectancy.

C. An irrevocable annuity that meets the requirements of subsection B of this section is a transfer with compensated value.

D. The fair market value of a promissory note, loan agreement or related financial instrument that is negotiable, assignable and enforceable is a countable resource.

E. A promissory note, loan agreement or related financial instrument that does not comply with subsection D of this section is a transfer with uncompensated value. For a promissory note, loan agreement or related instrument that does comply with subsection D of this section, the difference between the outstanding principal balance and the fair market value is a transfer with uncompensated value.

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