Follow
Share

My in-laws are still in their home and are in their late 80's. If one or both of them has to go to a Nursing Home, they will need to be on and will qualify for Medicaid. They own half of a duplex, don't own a car, have a decent income stream, but very little savings - less than $10,000. They do have small life insurance policies, husband has a $10,000 policy, wife has a $6000 policy, the beneficiaries are each other. Wife has little to no memory and no financial input. Husband has some cognitive impairment and is very resistant to change, The question is, if one of them were to be admitted to a Nursing Home using Medicaid for most of the cost and the spouse at home were to die, what happens to the life insurance payment? Also, if the nursing home resident were to die, we have the same question. This is basically their burial insurance, so if the nursing home were to seize it, the children would need to pay for the funeral expenses.

This question has been closed for answers. Ask a New Question.
Find Care & Housing
Get an eldercare attorney or at least an estate planner, one who is clearly familiar with Medicaid regs in your state, and ASAP to untangle this. It may seem pricey but you can't afford not to. Possibly, beneficiary designations ought to be changed because even the 10K in assets they currently have could require a spend-down. I also had to get my parents' home out of a trust so it became a non-countable asset and that ws pretty dicey due to some issues with paperwork at the county level. And the funeral policy really does have to be just that, set up so that it is not usable for other things.
Helpful Answer (1)
Report

igloo572, thanks for the helpful, thought provoking response. Regarding the duplex, it's much more complicated than what you suggested it might be. The in-laws bought the house many years ago with his brother and sister-in-law. The brother has since died and the sister-in-law is living in her half by herself. She is also in her late 80's and although she has mobility problems, she does have all her mental capacity. The original deed had all 4 names on it, but each couple owned half of the property, it has one tax bill, etc. Since we told my father-in-law that he needed a will, etc. a Revocable Family Trust was set up in 2011 and it transferred ownership of an undivided one half interest of the house and property from the in-laws to the Trust. This was done as we thought that for sure one of them would be in a NH within the 5 year look back time period for Medicaid. In hind sight, that was a bad decision, but who knew? The insurance policies need to be changed, we need to look at the community spouse allowance, etc. Thanks again.
Helpful Answer (0)
Report

The house they live in, you mentioned that it's a duplex. Do they own it and so, the other half is a rental? And could be viewed as Income producing rental? Or do they just own their set half of the property, so each side of the duplex is its own unique for tax assessment property?

If one was to go into the NH, look into what your state has as its allowance for the community spouse. It called CSRA community spouse resource allowance or MMNA minimum monthly maintenance allowance. each state sets the amount uniquely. Like TX has it as right under $ 2,900.00. So if NH spouse was to have 3k income, in theory his meducaid copay coukd be in thiery only $ 100 a mo, as the at home spouse gets the rest. CSRA is important to do whatever to maximize as often once the more ill spouse goes into a NH, the others health improves as they are not working 24/7 caregiving. If the CSRA is high enough and their expenses are somewhat minimal, it could be that you could hire in home Heath care to assist the at home spouse a few hours each week. So think if that could be a possibility.

About the 10k in assets which is in savings, he is allowed 2k in assets. She as the CS is allowed about 117k. As such, she should be able to keep all of the savings and he still totally qualifies for Medicaid.

There will be a problem with the life insurance policies but not what you think......if the healthier & not in the NH spouse should predecease the NH spouse, then NH spouse will inherit the insurance pay off as they are the beneficiary. Bad bad idea as the increased funds paid to them as beneficiary will take them over the amount allowed by Medcaid. So they get ruled ineligible, have do a spend down, reapply....total butt rash and who is going to do all this? It's you right? I'd suggest that you look into getting their beneficiary changed to be you or perhaps a special needs trust for either of them so that there is never any future issues with assets & Medicaid.

You know most of what you find & articles on Medicaid & NH are from the viewpoint of an individual applicant. A widow or widower. For those, which are something like 80% of applications, although its document heavy, its pretty straightforward....they have to be impoverished with 2k in assets & within your states income limits. But for CS situations it's much more complex. Like the above little detail as to what happens with life insurance beneficiary payout. Personally I think a son or daughter can do their parents individual medicaid application if they have been actively involved in their life, BUT for CS situations your states rules & law really can have all sorts of nuances that need legal expertise to get the best situation done for both & having a eider la atty review thier situation would be best.
Helpful Answer (1)
Report

Thanks for your response. It's disconcerting, but we will have to deal with it. We will have to look for a way to transfer the ownership of the policy to either a trust or someone else, correct?
Helpful Answer (0)
Report

Medicaid will not consider it burial insurance unless the beneficiary is a funeral home with a contract in hand.
If these are term policies with no cash value, they can remain.
If these are policies that have cash value, like whole life, they would have to be cashed in by the owner of the policy IF the owner is going in the NH.
So if the home spouse dies and the NH spouse gets money, Medicaid is interrupted until it is spent down on care. No money for a funeral.
If the NH spouse dies, the home spouse keeps the full amount and can pay for the funeral.
Helpful Answer (2)
Report

This question has been closed for answers. Ask a New Question.
Subscribe to
Our Newsletter