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Spouse owns a cremation policy that covers the opening of the grave, and a few death certificates, transportation from crematorium to grave site and misc. expenses. It does not cover the transportation from either the hospital or SNF to the mortuary or crematorium. This must be paid upon his death. I'll have to pay the cost of his probate/attorney and whatever misc. expenses come up.


I own a partially paid 20K whole life policy on his life.


My husband is the insured, I am the owner, and I am listed as the beneficiary. Neither the funeral home or the state are listed as beneficiaries.


He has not died, but I figure it's time to clarify this detail.

We were required to submit all insurance policy status/values at the time of application. We have also had to submit updates annually. It's 6K cash surrender value is on record with SNF Medicaid.
Yes, I'm 100% owner of the 20K policy on husband. I'm listed as beneficiary.
My husband's cremation policy proceeds are directly payable to the funeral home. From there, I must pick up costs. We figured several years before Medicaid that having 20K payable direct to me was the best way for me to manage/control expenses that can't be predicted ahead of time.
I don't know what the shortfall will be after the home receives all of my husband's policy proceeds. I expect to need some of the 20K for immediate expenses.

I don't know if any left-over funds are owed to Medicaid. I don't know if remaining funds are considered part of his estate or if it's considered my money since I'm the policy owner and beneficiary.

I don't know anything about life insurance and taxes. Given the 20K is payable to me for his death, I don't know if it's even considered income. We have always filed jointly so it would be accounted for that way, unless a CPA told me to file under a different status.

Given all the other items to deal with during the Medicaid shuffle, I'm just now looking into this part.
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Reply to Houseplant102
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Just a guess, but - if you own the policy, and are the beneficiary, I don't believe that would be considered your husband's asset, and thus wouldn't be something Medicaid would have a right to... If the policy was on your husband, and owned by him, with you as the beneficiary, it's a different story... In that case, in order to be elegible for Medicaid (and the spend-down required) that policy would have to be cashed in for whatever "cash value" was available and applied to assets.
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Reply to ImageIMP
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So you bought the life insurance policy for your husband and you are the beneficiary?

I would check with a CPA because I think, (laws may have changed) that when life insurance is purchased that way it is subject to estate taxes even spouse to spouse.

I assume that this policy came up during the Medicaid application? If not, they may get ugly.
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Reply to Isthisrealyreal
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