I am POA for my mother who is 103 years old. She has been in Memory Care for three and a half years. Her funds will be depleted by the end of the year. She has two life insurance policies that will have to be cashed into quality for Medicaid. One is from her former employer as a retirement benefit.
I'm meeting this week with a funeral home to set up arrangements to sign the policies over to them as partial payment or set up a burial fund.
I just discovered that the policy from the employer says that it is un-signable. I have a feeling that there is no cash value.
Since you can't have more than $2,000 to apply for Medicaid, I don't think she will quality because of the policy.
My idea was to care for her at home with help from an agency. Then if something were to happen me, she would be placed in a nursing home and apply for Medicaid.
I met with an elder law attorney almost a year ago. She was supposed to contact the insurance companies to see about cashing them in. She never looked at the policies. She was charging $10,000 for the Medicaid application when the time came. I called a couple of times to see what was going on and never received a call back. She was also supposed to apply for Aid and Attendance with the Vets. I said I didn't need her services. I would have paid her and have my mom not qualify.
Nursing homes near me in PA. are $10,000 plus per month. I can't place my mom and have the possibility of being responsible for that.
The only other relative is a brother in Calif. who is secondary POA.
Sorry for the long post but I really don't know what to do.
BUT
the $ amount shifted could be limited to 8K or 10K. And how it needs to be used by FH to be ok as to “preneed” may be narrow. If all she has is the smallish J&J term policy, and she / you need to have $ to private pay for aides to help you at home w her should she move back, perhaps want to think about doing a cremation. If her policy will allow for it to do a breakout with balance back to her.
old life insurance policies can be really convoluted to decipher! Good luck in all this and try not to yourself get too too overwhelmed.
also if she does move out to go back into your home, try to see ahead of all this if she could be eligible for hospice. On the average for staff, it’s 2-3 time a week for a 2-4 hr visit (including bathing) BUT a good hospice can bring in all sorts of DME durable medical equipment, like a pressure mattress and speciality bed, a geri chair or geri bathing chair or other bathing or transferring adaptive stuff, they can also sometimes order speciality nutritional (my moms hospice did as she was bedfast) and disposable feeding bibs. Hospice is all a MediCARE benefit too. & as that, it’s self directed so she / you can pick the hospice and change providers if need be.
To me, imo, what you need to determine is…. 1. do the policies have to actually be cashed out? 2. do her policies “age out”.
If they are term, actual value does not exist till she dies. Term is face value only. & zero actual value for Medicaid as it’s not an asset….yet!. Term does not have to be cashed out. If beneficiary is you, then you get $ after her death & payout bypasses probate so in theory bypasses Medicaid. Now if “estate” that is beneficiary then you will have to open probate and State could file a claim against estate.
Now..
Medicaid will want all pages of policy. & in my experience will place responsibility to prove term rather than whole life on applicant; and States will want to place a $ max term life payout as allowable for LTC Medicaid eligibility; maybe 10K, maybe 25k. So if over that state could try to get her to change beneficiary to be state Medicaid division 1st to reimburse costs paid and then you as 2nd beneficiary on any balance left. This gets real in the weeds legally and mom/you needs an attorney to deal with. Medicaid caseworker will probably not be dealing with this ever as it’s insurance licensing and legal work, it’ll go to a division of Medicaid that does this.
Now if whole life, those have a cash value that needs to be cashed in & spent down. On whole life, are quite a few that buy these…. are viatical settlements. Google it. What they sell for is based on policy payout & age / disease on the person. Your mom is super old, payout will be way more than for a 70 yr old. But whole life needs to be significant, like kinda 500k minimum payout policies, to get interest. Viatical got first done significantly for those w AIDS as many had $$$$ policies done by employers as an executive perk. There are imo predatory buyers out there too for lower payout policies…. so beware! But if it’s $34,567.00 whole life that’s keeping her from being eligible, u don’t a lot of options.
if these are really old then determining “term” V. “whole life” may not be simple. Policy maybe 2-3 dz legal length double sided pages. Your less than stellar attorney may have found them to be undecipherable, &/or that original underwriter long gone and trying to find subsequent ones beyond difficult and she is not herself an licensed insurance agent so unable to legally make a determination as to its type (term or whole life) and she’s not RRM / tax attorney so can’t do anything that needs standing b4 the IRS as payout determined by actuarial tables.
My back side of 90 when she applied for LTC Medicaid mom had a 1960’s policy, paid up decades & it paid a dividend. Policy required dividend plowed back into policy too. Face value 1K, yeah term policy face value 1K. That’s what I put in in her application. Caseworker needed clarification. I got a FA/stockbroker (not mine either) who held an insurance license to do policy review and do a letter stating that it was term w face value of 1k, not whole life, as per underwriting. And signed it including his insurance and series 7 license info. Dividend paid amortized over 12 months too, this done so that mom would not go over her income limit the mo dividend paid. The caseworker suggested this as it’s kinda common for dividend and mineral right royalties paid. Dividend had a IRS tax form issued, so it was a known entity. If your mom has this CPA or her tax person can do the letter if need be. Caseworker just needs something legit to place into the file to establish why not an issue for eligibility.
On “age out” policy. Often life insurance has age cut off. Like 90. So if a 50k term life policy & they die at age 89 & 10 months the beneficiaries get 50k, but if they live another 3 months, they r 90+ so no payout. I think u need to clearly find out what “unsignable” means…. If she’s aged out, policy is zero value; if means unassignable, then it has to remain as written & paid to initial beneficiary, can’t transfer to FH.
There is a letter from my mom's employer stating that as a retiree, she has a
life insurance policy(which I have) and she is covered for $6,000 for the rest of her life. As you can see not much.I'm meeting with an attorney who works with the funeral home to see what we can find out about it.
The business end of all nursing homes try to shakedown families into believing that they will be held financially responsible if they have a POA and even if they don't. This is total BS and it's nothing more than an intimidation tactic, a shakedown, to get more money for a resident.
Your mother's policies may very well have cashed-out at her age and no longer have cash value. My father's insurance policy from his retirement cashed out because he lived to be too old to collect.
Medicaid understands that this is how some kinds of insurance policies work.
As for the lawyer you paid ten grand to. I'd talk to a different one and maybe have a word with the Bar Association because you got swindled big-time.
If your mom has to go into a nursing home at some point, the nursing home will do the Medicaid application for her. You will have to spend down her assets for her care fisrt, but they do it.
services any longer.
Thanks for your info.
I don't have the citation right now, but it's illegal for attorneys to charge to qualify someone for VA benefits, which are free. There's a statutory mandate for that. This woman is not someone who should be practicing law!
As to the insurance issue, have you contacted the insurance company directly?
You had a dreadful attorney. You should not use that attorney again, and make certain right off bat that attorney gets an hourly fee, and bills only for work done.
You do need legal advice. I do understand how difficult it can be today to get good advice.
I am a little confused that you say Mom has been in care for 3 years, and then speak of caring for Mom at home, and aids? Could you elaborate on that?
I think the only thing you can do is get insurance either dropped or assigned over. One policy you already know cannot be, but the other you are still awaiting infor from company for.
I don't envy you all this. I was POA and Trustee for my bro and the first year's learning curve was terribly steep and I was riddled with anxiety. Once things were in place it became easier but the first year was a nightmare of copy machines and faxes and sitting on the phone.
I wish you the best of luck. Igloo here is quite up on a lot of these details and I will refer this port to her for you so she will be sure to see it.
I sure wish you the best.
When she went to MC, I was still working so didn't have much choice.
I'm retired now and think I can manage for what time she has left.
Issue is if something happens to me.
call the insurance company, ( I know others don’t advocate this, but anytime I needed to talk to someone to get info, I told them I was my mother) The insurance company probably won’t talk to you without jumping thru hoops. My FIL , thought he had $20000… nope gone …
i would hold off on cashing in policies until you need to. Find out from the companies how long it takes to get the funds from surrender. You will want to have the income tax withheld, and there is surrender fees. Your mom could very well pass in the next 6 months.
meet with the funeral people , get your ducks in a row. If you need the insurance money for irrevocable trust, the trust can be done when you receive the insurance monies. I waited to do that a couple weeks before I was going to make Medicaid application. My mom died two days before my appointment.
contact your county office spot aged and disabilities. My county name is ADRC. They did the assessment Medicaid required. Gave me all the information of what is needed to apply. Then I was to bring that to my appointment. No fees, this is your taxes at work. $10000 …stealing and greed…
I hope this helps… it’s daunting….but you got it..
money I have left to work with.
I'm going to call senior services to see what they say.
Thank you.
Then, the money can be used to pre pay a funeral or be put into a burial
fund. The allowed amount depends on the county you live in.
Thanks for your reply.