Two on herself and two on my children. This is causing her not to be eligible for Medicaid. If I take over ownership on these policies will there be a penalty for her to qualify for Medicaid.

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I'm a legal professional who works for a large insurance/annuity company. I see what happens on the other end, and it varies greatly depending on each person's situation - surrendering the policy outright, taking a loan against the cash value to spend it down, assigning it to funeral homes, transferring ownership. Again, it really depends on the situation and the program rules that drives what people may do with a whole life policy.

Could you consult with an attorney who specializes in Medicaid/elder law and discuss the options? The bottom line is that the cash value of the policy is a countable asset for Medicaid, but there may be ways to potentially handle it (assignments of a portion of the proceeds to Medicaid, surrendering the policy and using it to pay for funeral expenses, surrendering outright and using the cash value for care until exhausted). A good attorney who deals with Medicaid may be worth the investment to get Medicaid coverage while complying with the program's rules and potentially retaining some (if not all) of the policies.

Best wishes.
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Does she have prepaid funeral arrangements? The policies can be cashed in and spent down on that.
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Yes there will be a penalty. The state only pays for indigent people, not for people who enrich their family members. If she has assets, she should use them for her own care.
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Sweetmilk, I am moving your post back closer to the front of the list. Hopefully a caregiver who is familiar with whole life insurance and Medicaid can answer your question.
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