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Mother has no savings or life insurance. Can I buy a life policy for her to cover final expenses. I would be beneficiary because I am executor of her will and will be responsible for her final expenses.

You could also do what's called a "mortuary trust" or funeral trust which is set up with a funeral home as an irrevocable trust. You don't have to use that funeral home, and can transfer the funds to another when the time comes if you like. It's not the same as a pre-paid funeral in that regard. You are not required to make any kind of selection for goods or services, but can just leave it open-ended. The funds are held in trust usually in a bank, and the funeral home is required to give you an accounting I think annually (at least in our state). An irrevocable mortuary trust is not counted as assets by Medicaid, and is not subject to estate recovery after the person passes. The amount allowed I believe varies depending on the particular state's Medicaid rules.
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JoAnn29 Apr 2, 2020
I think...thatvany money unused of that trust does go back to Medicaid. But the money can be spent on anything to with a funeral. Flowers, the luncheon, ect.
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Actually as beneficiary, you do NOT have to claim the life insurance money as income. You only have to report any interest you received on it. https://www.irs.gov/faqs/interest-dividends-other-types-of-income/life-insurance-disability-insurance-proceeds
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Isthisrealyreal Apr 2, 2020
If you buy insurance for someone else this doesn't apply.

This is if someone buys their own and names you beneficiary or sells you their life insurance or transfers it as surety or something.

If you buy insurance for another person and name yourself beneficiary you have to claim the money.
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Just a thought.

First, if a person goes on Medicaid for LTC, an insurance policy that has cash value will need to be cashed in to pay towards her care. (or put towards a prepaid funeral)

I would check with an insurance company and see if you personally can insure Mom. Like, you own the policy but are covering Mom. At 79 it may be expensive so I would only get enough to cover a nice funeral. My Moms was 11.5k. That was a regular burial. If Mom has any debts, you will not be responsible for them anyway. If no money, the creditors lose.

Another way would be to do a prepaid funeral. You could check this out with the funeral home you would use. I had to cash Moms policies in, I then used the money to put into a funeral Trust set up by my funeral director. The money got some interest. Not sure if you can put in a small amount and add to it?

This was years ago but I knew a woman who insured her ex-husband. That way if he died, she would still have money to support their daughter.
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If you buy life insurance for your mom and name yourself as beneficiary you will have to claim that as income. You can't use her money for this unless it is excess after her caregiver and living expenses are paid.

If your mom has no money or assets then you should resolve that she will be cremated as that is the cheapest route.

You should not be planning a big funeral for her, her money should be paying for her care and her living expenses. If she has bills that need to be paid you should be completely transparent with your sister.
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Age 79 and with dementia and other health problems....the life insurance ship has likely sailed on by. Even colonial penn is likely not an option, 75 is the age cap for the $50k policy through them. Your mom is 79 and would need to pay on a policy for quite a awhile before it had enough cash value to pay for her final expenses.
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You are not responsible for her final expenses....her estate is responsible.

i am doubting you will be able to purchase life insurance for her. Instead...set up a payment plan with a local funeral home. Prepay her final expenses.
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