My sister has a very small life insurance policy and is on Medicaid. She has had the help of an in-home aide for a few years. She is so afraid of being Cremated which I believe is normally done by the State at death. So, I advised her to take a small life insurance policy out so she could afford the monthly premium which would be pretty high at her age of 85. I then told her to put aside some additional money when possible so that she could have a normal funeral without having to depend on the State or Cremation. Now she has over the years accumulated several thousand dollars in her checking account adding my name on the account as "in trust for" which means that I have no access to it until she passes away at which time, I would be responsible to handle her funeral. My concern is, that when she passes away, could Medicaid step in and confiscate that money to re-emburse the State for money spent in her care over the last few years? I would feel so guilty and sad if she had to be cremated against her will. Also, could she lose some of her Medicaid benefits if the State were to become aware of money in her checking account even though it would be saving the State burial expense should she pass away. I don't know how to advise her at this point...please help.
With my loved one, they did consider the cash value of her life insurance policy.
The bank account: If she is just a trustee, the account is not considered her asset. If she is depositing money into the account, that is a form of gifting and Medicaid won't like that.