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I am so sorry to say that the life insurance policy is treated as an asset. Life insurance companies are required, upon request, to convert that policy into a long-term care policy to help pay for your husband's care instead of one having to abandon it. It then becomes part of the Medicaid spend-down. One is allowed to preserve part of the insurance as a death benefit as it is spent down.

This is all very complicated, Betty. I can't urge you enough to gather all of your assets together, including that and any other life policy, and take the information to an elder law attorney. You simply MUST do this immediately.

He will be able to advise you on how you may preserve a portion of your assets and still satisfy Medicaid. Spousal impoverishment isn't the intent. But getting "your husband's share" of your assets most certainly is. The less you can make "your husband's share," the more you will have left for yourself.

I swear to God, if there is one thing that bothers me most about our longevity and descent into dementia and other diseases, it is the scenario where miliions of hard-working people see their assets go up in smoke toward the end of their lives. Where spouses are practically impoverished to take care of spouses. There is something intrinsically wrong with this.

It breaks my heart. It really does.

And THEN, when I read on here about someone working themselves to the bone caring for their spouse/mom/dad and NOT spending that person's assets to provide actual relief for themselves? My heart breaks again.
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As long as YOU are the owner, it is not counted as HIS asset. It would affect Medicaid if the policy owner is the one applying. I own a life insurance policy that covers my sister. Medicaid does not count it against her.
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Sorry, poster, I missed that you are the owner of the policy. Ignore my blather.
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Betty - you own it, it's your asset not his. But as Maggie said you need to see an elder care lawyer.

If you are staying at home & hubs is going into a NH and applying for Medicaid, you want to do whatever you can to enhance your assets as the "community spouse". For most states, the CS can have 113K in liquid assets. Now if you find that you both together have more than than, then it's going to need to be spent down. And this is where a elder law guy and an elder financial advisor who understands Medicaid can be priceless for you. For example, say you still have a mortgage & plan on staying in the home, then paying off the mortgage with whatever funds take your over the 113K is often a good idea. Some states allow for the CS to do a SPIA (personally I hate annuities but if you have to do something like yesterday with assets then a SPIA is good as they can often be structured to be an exempt asset for the CS's tally).

For NH spouse & CS spouse, Medicaid seems to base the financials on a "snapshot" day in which your assets are based upon. If you need to change things, you kinda need to get these things done & cleared through your bank or changed in paperwork before hubs applies for Medicaid and the snapshot day is set.

The whole CS rules are very different and can be confusing especially if your focused on hubs care & needs and can't get much beyond concentrating on that. Most Medicaid NH info is geared to widows & widowers and basically they have to make themselves impoverished. That is NOT you!

For couples, Medicaid allows for only 1 car. If you have 2 like most couples do, and you give 1 to your grandchild, that will cause a transfer penalty for Medicaid.
Better idea is to trade in both and get 1 newer & more dependable car. Another issue is that most couples, have each other as their beneficiary upon death. You don't want that because if something happens to you and hubs gets the insurance, then he will be ineligible for Medicaid as the insurance $$ is now a asset. It's these sorts of things, that the lawyer can help you sort through and come up with options.

Also you can file for MMNA - monthly maintenance needs allowance. Think of it as alimony for the NH set. When hubs goes into the NH on Medicaid, all of his monthly income will need to be paid to the NH except for a small amount that is his personal needs allowance. The PNA ranges by state from $ 35 - 90 a month. His income co-pay or his "SOC" (share of cost) is required under Medicaid rules. BUT if you need some of his income in order to make ends meet or to continue to live as you currently do, then you can file for MMNA. MMNA varies by state (like for TX it's $ 2,300 maximum and that's a pretty nice amount). But you have to apply for it and the elder lawyer will know how to do this. Good luck.
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