Nursing home has submitted application for Medicaid. Is it too late to transfer life insurance to funeral home? - AgingCare.com

Nursing home has submitted application for Medicaid. Is it too late to transfer life insurance to funeral home?

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My Mother went into nursing home for PT but is now needing to stay long term. I never realized till now that she has several life insurances that will have over $3,000 in cash value. She has had these for years to pay for her burial so is it too late since the app. has been submitted to transfer the largest ones to a funeral home?

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Just went thru this. When applying to Medicaid they ask if there are any insurance policies. My Mom had two policies cash value 13K, I was allowed to cash them in and prepay the funeral. You are allowed cost of flowers and maybe the luncheon, not sure about that. You need to contact the insurance company and have them send you what the value is and cash in value. When u do that you can pay for the funeral and the balance will go to ur spend down. You really need to find out what assets parents have. Socks, shares, CDs etc. Anything that can be cashed in for care.
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Instead of asking here, ask at the NH, ask at Medicaid/Medicare and even ask at the Funeral Home.  You can also find an Elder Attorney - I have read here @AgingCare that there are some that work free.

When my mother passed, I took over for my Dad's finances.  I immediately called the Funeral Home and asked to prepay his expenses. As he almost died twice the same month my mother passed, the Funeral Home allowed me to prepay in full. I knew that if he went into a NH, they might take everything he had and not leave enough for a funeral.  The Funeral Home was very helpful.

As luck happens, he lived 7 more years. We straightened out all his physical needs the first year :)
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Vegaslady, I got it from the 2017 Medicaid Resource Levels. See below. This is for NY. I'm not sure what state jewelrylady is in.

How do I know if my resources qualify me for Medicaid?

The chart below shows the amount of resources (if applicable) you can retain and still qualify for Medicaid.

Resource Level (Individuals who are Blind, Disabled or Age 65+ ONLY)

Family Size

1 $14,850
2 $21,750
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Where did you come up with 14k in assets? Anyhow, you can probably do work and get some of the life insurance cashed out to buy a burial plan. Just watch what dollar limits are and try to get it all done in one month. Medical coverage is not prorated for the month and they look at what your assets are at midnight on the first of the month.
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Medicaid allows you a little over $14k in assets, so using those to purchase funeral arrangements should be fine if you are under that. Ask the nursing home Medicaid person.
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JL, Medicaid will ask about the life insurance policies. It may be that if they are not able to be changed and payable directly to the funeral home without being able to be refunded that your state may exclude them (your profile doesn't say where you live). However, it sounded like the life insurance policies were not directed to a funeral home or trust for one but rather to either the estate of your mother or you. Depending on who the owner of the policies is may affect how Medicaid views them as well. It's worth checking with the person handling the application. My biggest point is not moving stuff around once the application is made until you get direction from Medicaid on status of the application.
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The nursing home knows about the life insurances but Medicaid
has not requested any information on them yet.
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I believe you can prepay for funeral expenses and that does not affect a Medicaid application but it may not be possible after the application has been submitted.
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Once the application is made the financial snapshot is done. If you start moving money now it could result in problems with Medicaid. If the policies were found and not mentioned on application, you need to contact person handling application. You are limited in most states as to how much you can have for funeral expenses and how it is set up. Worth consulting a lawyer experienced in Medicaid to verify best way to handle. Do not start moving money now that application was submitted! It raises red flags for Medicaid.
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