My Mother is on Medicaid and she had a stroke. She has a life insurance with my sister as beneficiary. Can the NH take this?

I would see an attorney about it for sure. When I applied for my cousin, her Life Ins. had zero cash value, but the social worker who processes the application told me that she is allowed enough to bury her.

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!

Not necessarilly. It depends on the amount is what I was told, HOWEVER - her insurance co told me to do THIS - change the OWNERSHIP of the policy - she would still make the payments (as my mother does) and you could still be the beneficiary, it is just that the OWNER of the policy changes. For example - we had a policy I paid for on her, but because she didn't "own" the policy, they could not touch it. DO THIS FAST. Our company will change it as soon as they get my paperwork....

Does this make sense? This policy is only to bury my mother, after I paid for my father's funeral - I know that I can not afford another - heck, this one will barely cover a coffin and grave opening...

Good luck!

I went thru this with my mother when she entered the nursing home. Any life insurance that has value I had to cash in then have a cashiers check made out to the facility. Make sure you keep copies of everything. This will come in handy if Social Security, Medicaid audits you and they will.

I have a sneaky feeling that Medicaid will be able to claw back on death but the nursing home ? Probably for the nursing home - outstanding bills . It does form part of her estate I am afraid and it is an asset albeit one she never sees

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.

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.

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

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.

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.

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.

Grace + Peace.
Bob