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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.

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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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I asked the funeral home to confirm if transportation from nursing home to funeral home is "package" of his cremation policy. I was told because there is a lot of paperwork to sign, they have to bring the body to the home first (where the offices are located). I was told the second leg of the journey - from the funeral home to crematorium is also covered with the policy so I should not need to pay more.

He has nothing left to gift. The house is in both our names so it does not need to be probated. Probate is an expensive process and would not help in any distribution or payment. To meet my needs, there is no need for Probate and the house and bank account passes to me. In filing Probate here, one is required to publish notices in the paper for several weeks, marshal all property, and wait for the hearing. The state has all our information and it's built-in claim, so as I see it, filing Probate would not change the outcome.

Assuming the contract was correct as I'm told i.e. no additional monies are needed to get him taken care of upon death, I will be able to use money to pay miscellaneous bills and hopefully keep the remainder for me and not have to give it to the state.
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That is good news and actually very typical.

Let's hope you get all the 20k to help you live.
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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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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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Sorry I could not get back to the site until now to respond to your question! I think you have a good point. Our policy benefit will not be enough to trigger a tax debt, especially when balancing actual income to the amount of medical deductions - up to this point.

I think you also make a good point because we don't know what laws may change. I leave open the possibility that the entire scenery can change by the time tax reforms are settled.
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When you buy a policy on some one else, it becomes income and not inheritance. If he bought it and named you it would be different.

I am surprised that there will be a charge for transportation to the funeral home, my nephew was transported from the medical examiner to the crematorium as part of the cremation. Can you check with other facilities to find out if that is normal?
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its normal for funeral homes to charge a transportation fee. It’s not a free service, you pay for it one way another. Some funeral homes incorporate it in to the basic service fee.
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If you own the policy, then I don't see where Medicaid would be involved. They can't consider an employers policy because the employers pays the premiums. I think its only those with cash in value. Like the one for cremation. I think that one is safe because its actually for a funeral. Not sure though if Medicaid would be get any left overs. Just make sure its all spent on the funeral. I was told flowers even the luncheon is considered expenses for a funeral.
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Would you have to Probate? I thought when will read what your is mine no probate was needed. Really, if he is on Medicaid, he dies with nothing but the 2k allowed in his bank acct. You are the Community spouse and will be allowed to stay in the house. A lean will be placed on it for his half (if ur joint owners) and won't be recouped until you pass or sell the house.
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