She cannot walk or talk. The nursing home says they can take her life insurance. She also has a separate burial policy. We live in Texas. Any advice on where to start or how to proceed from here?
I do not speak with authority yet I have a hunch that the nursing home cannot do so if it is term life insurance, having no cash value prior to death...If it is whole life, having some cash value if redeemed early, then I have no opinion, except to suggest that the nursing home is not the arbiter of Medicaid issues. I would suggest talking to the county social services people for Medicaid about the issue.
I will add that in my state (North Carolina) whole life insurance with cash value is considered a countable asset. The Medicaid recipient is only allowed to have $2000 in countable assets in my state.
There are no rights any longer and our government sucks money out of us that we do not have. You mention trust and everyone assumes there is a ton of money at the end of the rainbow. Even though we did everything right, I will be under attack from "the son" of my partner. He was left out of the Will intentionally. I have a contract for care of my Partner only because we thought this might happen. I will be paid out of the trust funds. I have not taken anything yet. I already have the Annuities representatives trying to get me to invest any funds back with them. One thing I did learn is that you can delay the payment of any funds to keep the tax man away for awhile. I believe it is up to 10 years. But if everyone is like me, we need the funds now. I was advised that a relative could actually FREEZE any accounts I have until their attorney can review the Will and trust. Amazing when someone can change what the 'one who died wanted done. We never attempted State aid as we knew we would not qualify. We are in that place that is too poor and too rich. Middle class. I kept my partner at home because we could not afford outside care. It would have eaten up anything that I would need to survive my remaining years. It is a shock is'nt it to find out the RULES and LAWS
I live in Illinois and when we put my FIL in the nursing home under medicaid, we had to surrender any policies that had a cash value prior to his death. We did pay for his funeral as allowed. The policy that came from his work, that only had value after his death, we were allowed to keep which has a value of $7,000 so we were led to believe. He just passed in May and we havent made a claim yet so I might be wrong.
I am thinking itis the same in every state. They take your cash however they can get it. I was just told my my life insurance agent in MD. that if the policy is in my name I don't have to surrender it. It is for my husband but I bought the policy. I remain skeptical about it anyway. Another person told me if I am on Medicaid, it is considered a loan and you will be asked to pay it back after the person's death. We lose, no matter how you look at it. At this point I do not qualify for Medicaid. I am too poor to put him in a NH because my money might not last long enough. I have spent the money unwisely, so I will never be eligible for Medicaid. So I have to wait until I think he is at death's door. Maybe then I can get him into an NH. But what will I do when he outlives the time. I only have enough for about 10 months in the NH.
If policy has cash value and the person that is in the nursing home is, or going to be on medicaid then yes, they can take the cash value as it is an asset. The trick is to have someone else be the owner of the policy and it becomes THEIR asset. With that said there are several rules about this. If the policy has cash value when the ownership is transferred AND it is within the 5 year look-back it is considered a gift and they will get that money anyway.If the ownership is transferred before the 5 year look back your are good except if it has more than $14,000.00 in cash value it may be considered a taxable event exceeding the $14,000.00 tax free gifting of assets. If you are looking at spend down options you are allowed to have a pre-paid funeral expense policy. Most funeral homes can provide this through a special policy. However , upon death, if there is any money left over from that policy after funeral expenses are paid the nursing home gets that too.
The NH can't take anything (they would have to sue you). Medicaid is a different story. It is worth the consultation fee to meet with an elder law attorney. Please do this immediately. Check with your local Bar Asn to find a good one. Also, there is a world of difference between what Medicaid can grab and what they actually have resources to pursue. Medicaid will NOT go after $50 checks to grandchildren, but a $5,000 check is another matter. This is where the attorney will be most helpful, they can tell you what is common practice in your area!
Also the look-back has gone from 3 years about 7 years ago, to 5 years, and just now to 7 years look-back. I was told to not even give my grandchildren a gift on Birthdays or Christmas for the last 7 years. Not even a check for $50. I just can't believe what a miserable situation this has become financially.
Please remember that when you are on Medicaid your Government is financing the care you could not afford on your own. Sorry they do want to recoup their monies so that others may be financed in the future. You do not get a free lunch just because you got old or sick! Granted, we need a better system, but that would need financing too. Higher taxes maybe?
OldBob is right on this one. We are in Texas. Term life policies are not considered assets but whole life policies are. You'll have to cash them in and purchase a pre-paid funeral policy from a funeral home. Have everything paid for in advance, flowers, limos, casket, cremation, everything. Texas still has a 5 year look back I hope. It's very important to talk to an elder attorney - worth every penny. There are certain kinds of trusts that can protect your home from Mediciad - that is of course, if you even qualify.
Oregon girl's situation sounds a lot like ours. My husband is still okay at home by himself, but I know that won't the case much longer. I have to work full time just to pay our bills. Lots of people would think that there is no way we need financial help, but in today's world that's not the case. We cashed out our IRAs two years ago and sunk the money into a smaller home, because we knew we'd have to do that for Medicaid to cover anything - if they ever will. Ran up credit cards making all the repairs that were necessary. Social Security is not near enough for us to live on, and if my husband ever has to go into a NH and is "lucky" enough to qualify somehow for Medicaid, then his SS will go to the NH. Even if I then work full time it won't be enough to cover the bills. Everyone needs a strong long term care policy beginning when they are young and can afford it to avoid this struggle at a time when life should be less stressful.
I would suggest talking to the county social services people for Medicaid about the issue.
I will add that in my state (North Carolina) whole life insurance with cash value is considered a countable asset. The Medicaid recipient is only allowed to have $2000 in countable assets in my state.
Grace + Peace.
Bob
The trick is to have someone else be the owner of the policy and it becomes THEIR asset. With that said there are several rules about this. If the policy has cash value when the ownership is transferred AND it is within the 5 year look-back it is considered a gift and they will get that money anyway.If the ownership is transferred before the 5 year look back your are good except if it has more than $14,000.00 in cash value it may be considered a taxable event exceeding the $14,000.00 tax free gifting of assets. If you are looking at spend down options you are allowed to have a pre-paid funeral expense policy. Most funeral homes can provide this through a special policy. However , upon death, if there is any money left over from that policy after funeral expenses are paid the nursing home gets that too.
Oregon girl's situation sounds a lot like ours. My husband is still okay at home by himself, but I know that won't the case much longer. I have to work full time just to pay our bills. Lots of people would think that there is no way we need financial help, but in today's world that's not the case. We cashed out our IRAs two years ago and sunk the money into a smaller home, because we knew we'd have to do that for Medicaid to cover anything - if they ever will. Ran up credit cards making all the repairs that were necessary. Social Security is not near enough for us to live on, and if my husband ever has to go into a NH and is "lucky" enough to qualify somehow for Medicaid, then his SS will go to the NH. Even if I then work full time it won't be enough to cover the bills. Everyone needs a strong long term care policy beginning when they are young and can afford it to avoid this struggle at a time when life should be less stressful.
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