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My dad is the policy holder but me and my siblings are the beneficiaries. Can Medicaid take everything? She is currently living in a nursing facility and we are in the process of applying for medicaid. My mom is not expected to live more than 1 to 2 years. Should we even get medicaid envolved? Thanks in advance for your answers. My family and I are so overwhelmed and want to make the right decisions.

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To the best of my knowledge, if there is cash value to the policy it will go to Medicaid. I believe that if your dad keeps paying until your mother dies, Medicaid will take the payout as well (if the cost to Medicaid of her care has exceeded other assets).

You suggest that there may be a choice about whether or not to use Medicaid. That indicates to me that there are still assets available so I'd suggest that you and you dad talk with an elder law attorney about how best to handle this.
Good luck,
Carol
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If you would go see an Elder Care attorney, you could get the correct answers that apply in your state. Also, the administrator at the NH can help.

Does she own a house? That is typically how medicaid is paid back. (from the sale of the home.) During the 5 year look back, medicaid will look at your mom's spending to see if she was giving money away, in order to qualify.

The value of the policy can be considered an asset.
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My mom and dad are selling their house and the new owners are closing on it in three days. Medicaid informed my dad that he will have to spend my mom's half on his and her prepaid funeral and the rest will need to go to the nursing facility to pay for her care. My mom has lost a lot of weight and needs new clothes and they have told him her money is to only go to the prepaid funeral arrangements and when he asked them why we wouldn't be able to use her life insurance policy for it they wouldn't give him an answer. Something seems fishy.
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This is a complex question, because if the policy was purchased during the marriage, then the policy may be considered community property equally owned by both your father and mother. This is true even if your father is the owner of the policy, since money paid for it would most likely be community money. This is a question you should address when applying for Medicaid, because laws can differ between states.
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Forgot to ask whether the policy has a surrender (cash) value. If it is term life, the policy has no cash value, so would not be considered an asset by Medicaid.
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