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My sister has been on Medicaid with a CT. State paid aide in her home for several years after surgery. Rather than having the State pay for a funeral and possibly do a "cremation" which she is so against, I encouraged her to obtain a life insurance policy of $5,000 which of course would never be enough to cover her burial expenses but would partially cover her funeral so the State would not have to kick in for that. Since most funerals in CT. cost around $8,000, I asked her to hold a couple of thousand in her checking account to cover the added expense. Because she has no children, no spouse, and only me as her sister, I knew I would have to handle her funeral. We went to the bank and she put my name on her account as a Trustee so that I could withdraw that money at her death..and only at that time. My concern is that because she was on medicaid for so long, could they step in and take that money to pay them back for money owed to Medicaid over the years? I don't have the means to pick up the remainder of the funeral expenses, so what would happen here? She is 86 years old and not in good health, so I want to be prepared. Thank you...

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In Ohio it's 6 months from date of death for creditors to file a claim or they're out of luck. Some people know this and will start probate either a month or 2 before the expiration of claims against an estate or after (if they can).
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Every state sets the priority of claims in probate. Connecticut sets the priorities in the following order:
1.funeral expenses
2.estate administration expenses
3.claims due for the last sickness of the decedent;
4.all lawful taxes and all claims due the state of Connecticut and the United States
5.all claims due any laborer or mechanic for personal wages for labor performed within three months immediately before the decedent’s death
6.other preferred claims
7.all other claims (credit cards, personal loans, etc.) allowed in proportion to their respective amounts.
That being said, funeral expenses are paid first. You then wait 150 days in CT for other bills to show up, including MERP.
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