In a community property state, (WI), can one spouse change ownership of life insurance policies during the Medicaid look-back period in order for the insurance to be retained and not counted as an asset? The money will be needed to help pay monthly expenses when my husband passes. Without it, I would have to file for bankruptcy.
We always read that we should consult an elder law specialist. I have paid 2 and consulted a 3rd for advice. All had very good credentials. Yet I remain confused. One told me she didn’t know – the elder laws change so fast; it’s hard to keep up with the changes! The 2nd told me that my husband could not change ownership legally, that the policies would have to be sold. He said we’d have to sell all but $2000 of the policies, even mine, as they are all considered community property. This included 2 policies that were taken out at my birth and given to me by my parents long before the marriage. This made me question this particular attorney. Then he said it didn’t matter who owned the policy, if it was a policy for a Medicaid recipient, it was considered the recipient’s asset and needed to be sold. The 3rd was more interested in getting me to purchase his “package” of documents which contained the “key” to clarification despite the fact that we already have wills and POAs for finance and health.
It had been suggested that we place my husband in a nursing home as soon as possible. This had me frantically calling insurance companies during the Christmas holidays with their shortened hours and vacations. I felt I should cash some policies in during that current year and the rest after the 1st of the new year in order to spread the ultimate financial burden between 2 years.
Ultimately we did not have enough time to complete anything before the end of the year, and my husband did not have to enter a nursing home yet. We are now trying to look at this more carefully before rushing to sell.
Even though we didn’t have to start the look-back process, we realize any decision we make now will affect the next 5 years. I’m tired of paying for advice and still being confused. I feel like this is one of the last things I want/need in place, but don’t really know what to do. I know this is all very complicated, hence the advice to consult an attorney, but, if anyone has info or experience that would clarify any of this, it would be greatly appreciated.