Can I protect a life insurance policy that my father got from his brother after my father was already in a long term care facility?
He does reside in a facility in Pennsylvania.

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The insurer will likely issue your dad a 1099 Misc for the amount paid. IRS gets it and if your state does a state / fed matchup the $ will surface.
Also within his Medicaid application should be some sort of statement that any change in income or assets must be reported to Medicaid in a timely manner. & what type of penalty placed for not doing this.

What to do? Well imho it’s gonna depend on the amount of $.
If it’s kinda low..... 5k - 20/25k, you as his DPOA probably can find legit ways to spend down the $ within 30-45 days & likely ok. Like doing a fully paid preneed that Jo Ann mentioned. That & dental work, new glasses, hearing aids, updating legal if needed and a fancy wheelchair and presto! $$ gone, and gone within 2-4 weeks.
But if it’s more than 20/25k and this has gone past couple of months, there's going to be a private pay spend down needed and only once the $ is spent legitimately can he reapply for LTC Medicaid; and you may have penalty for not being in compliance with Medicaid regulations. If this is the scenario, I’d suggest that you as his DPOA schedule an appointment with a elder law atty that does Medicaid ASAP; I’d be wanting clear legal info as to if the insurance beneficiary windfall is dads to do a spend down (he private pays the NH) OR if there’s other legit options for the $, AND if his state will require reimbursement to date for costs of care paid by Medicaid (clawback from his assets). I just don’t see this as a DIY, too many moving parts. He has beneficiary $ to pay for this.

On Pittas, to me, it’s a fear fueled boogie man story. Our elders aren’t going to be an early 60’s mom, who is a Greek citizen with hubs still there, who had an accident in the US, hospitalized, and then to rehab creating a 80k rehab bill, who flys back to Europe. Opa! Ours are going to be past 65, getting SS $ or other US based retirement income, have mediCARE paying for a good bit of hospitalization & rehab, some sort of secondary insurance to MediCARE and then applying for LTC Medicaid if need be. Thetes gonna be $ and insurance. We’re going to deal with whatever auto insurance/ lawsuit for them. Elder will physically be here to apply for programs, or do depositions, or show up in court, etc.

You know, the case first went to arbitration, and Pittas won. The rehab - part of a large chain - opted to file a lawsuit and not accept arbitration. I think his lawyer did not do a great job.... perhaps thinking we won before so no worries no need to file new details.... well it was a before a judge only case and judge ruled in corporation favor. Pittas could have enjoined his 2 siblings in the case but didn’t. If he had, it would have been a 3 way split for the judgement.
Helpful Answer (1)

No u cannot protect the policy if he is already in a NH especially if on Medicaid. Medicaid will need to stop and the insurance money spent down. If u haven't already, you can prepay his funeral. This helps with the spend down and if private paying. If his is private paying, it needs to go to his care. If on Medicaid, you need to contact his caseworker.

The Filial laws are rarely enforced. They are laws before Medicaid. The ability of the children to pay is looked at. The case that is usually referenced is of a woman visiting her son and ends up in rehab for months. She was a non-citizen and returned to her homeland leaving a dept of 80k to the NH. The son was sued and had to pay the 80k. I feel the woman returned home thinking she could get out of the debt.
Helpful Answer (3)
FloridaDD Jul 2020
In the Pittas case, the mother was in an accident, and the judge commented that the son was not forthcoming in depositions.   I inferred from that there was insurance money involved that had not been accounted for.   Bad facts, not applicable to most people
? Do you mean dad was the beneficiary of the policy and brother passed away? Are you concerned because dad is on medicaid? Dad's resources must be used for dad's care.

IF i remember correctly, Pennsylvania is a filial responsibility state. Meaning the state could hold you financially responsible for the cost of dad's care.

More information is necessary.
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