Approach Annuities With Caution

Annuity Advice underlying market index— Some say that Florida is without the risk. Not only the scam capitol of the is there a catch—there are country. If that’s true, then many possible catches. The the annuity may well be the return on investment can state’s number one tourist fall short of the underlyattraction. ing index, even if the inAnnuities can be a usedex performs well. Hefty ful tool for some people, surrender charges, adminunder some conditions. Unistrative fees and other fortunately, unscrupulous Joseph S. Karp, costs are often buried in financial planners have C.E.L.A. the fine print. And because been known to promote the Equity Indexed Annuity is not conannuities as suitable financial vehisidered a security per se, it does not cles for people for whom they are have to be registered with the SEC, anything but. I have had people come and the would-be purchaser is not in to see me, in their 70s and 80s, who required to receive a prospectus. The have purchased annuities after being situation is ripe for abuse. sold a bill of goods about its beneIf you think an annuity may have fits. When they need the money for a role to play in your financial plan, living expenses or emergencies, they your estate plan, or your plan for find the fine print includes astronomshouldering long-term care costs, you ical penalties. should absolutely not take the plunge One of the “hooks” used to reel without first consulting with your cerin seniors has been the promise that tified elder law attorney. It’s also a buying an annuity, i.e., converting good idea to talk with your CPA. assets into income, will make them Caveat emptor! automatically eligible for Medicaid benefits. Annuities may have a place Listen to Joe Karp with in Medicaid planning and in estate Anita Finley on Saturday, planning in general, but by no means October 11 from 7:30-8:00 AM is purchasing one the key to the on WSBR 740AM and on the Medicaid castle. In fact, the enactInternet at www.wsbrradio.com. ment of the Deficit Reduction Act has made the use of annuities for MediJoseph S. Karp is a nationally certified caid planning purposes in Florida even and Florida Bar-certified elder law attorney more restrictive and complex than (C.E.L.A.) specializing in the practice of Trusts, ever before. Estates and Elder Law. His offices are locatAnother type of questionable aned at 2500 Quantum Lakes Drive, Boynton nuity, the Equity Indexed Annuity, Beach; 2875 PGA Blvd., Palm Beach Gardens; and 1100 SW St. Lucie W. Blvd., Port has recently grabbed the critical eye St. Lucie. Call him at 561-752-4550 (Boynof the Florida Department of Finanton); 561-625-1100 (Palm Beach Gardens); cial Services. This annuity is often or 772-343-8411 (Port St. Lucie). Toll-free touted as an instrument that allows from anywhere: 800-893-9911. E-mail: KLF@ s en i or s to take adv antage of an Karplaw.com. or website www.karplaw.com

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