If your parents have no assets except 2 small life insurance policies, can a nursing home take them if one needs long term care?

If memory serves me right, if it is an insurance policy with a cash value (like a whole life policy) then the cash value will need to be taken out and used in the spend down in order to qualify for Medicaid. If it is an older policy that pays a dividend, the dividend has to be plowed back into to policy so that it doesn't become an asset. For term policies, I think most states allow a small policy to exist ($1,500) and for larger term policies that are owned by the Medicaid recipient, the state can do a claim or lein on those funds in probate if the $ becomes part of the estate after death. How you can deal with that is to have a trust that owns the insurance policy so it is not an asset of yours or your estate but is owned by the trust. Trusts need to be done by an estate or elder care savvy attorney not DIY.

wolfie - so sorry about your brother. Does your brother have a will and are you named as executor for it? If not and he is still capable, you really should do this now as well as get him to sign a DPOA & MPOA for you. The hospitals are really strict on giving you any information or allowing you to make decisions without this due to HIPPA laws. You want to copy all his policy (health, life, etc) information so that when you speak with anybody you have it for reference. If this is a state program, I bet there is an on-line application for this and for administering his retirement and insurance. If so, i'd go ahead on go on-line as his representative and have it in place and passworded so you can use it on his behalf.

Also you want to get 1/2 to a dz copies of his death certificate. It is easiest to do this the first time rather than a couple of months later as it gets filed. Most banks or other institutions will require an ORIGINAL death certificate in order to do anything.

My brother just found out that he has terminal cancer with a life expectancy of about 2 months. I am the beneficiary of his state employee's life insurance. He is also on medicare disability. How can I be assured of receiving the death benefits from his policy, since I will need this to pay for his funeral and other debts?

Does it have to be an irrevocable trust? Hubby and I are caregivers for his mom. But about 13 years ago WE put OUR home in a family trust. It is not irrevocable. We are the trustees. We are in our early 60's. Guess we should see an Elder Law attorney on our own behalf :0) We don't have much besides our home. We just got our ducks in a row (so to speak) before we went on a trip out of the country about 13 years ago. Guess we definitely should update. We tend to forget about ourselves when all we can think of is 'someone else' :0)

It was a shock for me while starting the medicaide paperwork-I had paid a lawyer a retainer but being dumb I tried to do it all myself except when I lost it in the social workes office when my husband was still in rehab and she did help me-it really was her job to begin with-he died before we got medicaide which was good because I do not know how I would have managed on it-the house was safe because it was in a trust longer than 5 years.

The timing is important, since the lookback period can be long. I would double-check the part of life insurance, since the benefactor is the owner until he/she dies. I did not realize that change in beneficiary or adding it to a trust was a way to protect the asset. It certainly looks like something I need to investigate more. I've wondered how my mother would make it if my father had to go on Medicaid before he died. The life insurance money is important for her to live.

You gave good information I did not know you could put insurance policies into the trust-it is amazing how much information was not told to me when planning to have my husband place -life insurances are big deals and would be helpful to a spouse who had to go on medicaide-I certainly will pass this along as I am about the spousal refusual which might be helpful to others.

I had a elder care attorney set up an irrevocable trust for my mother. We then gifted her house into the trust. I had the ownership & beneficiary of my mothers two small life insurance policies changed to the trust as well. This way if she ever does have to go on Medicaid the house & insurance policies can not be attached by Medicaid. Of course there is still the 5-year look back period. So if you are thinking about doing something like this it is better to do it asap.

From what I understand the NH get the benefit as the family would receive if the person was not on medicare-the whole value of the policy but there is a clause that the surving spouse can use which is sposual refusal which has been kept secrate -in which a spouse can keep some of the person on medicaide's pension -medicaide tends to leave the surviving spouse very poor.

My parents are still home but dad has dementia. He is not yet at a NH. We will have to get him on medicaid when/if that happens. An elderlaw attorney told me to change the beneficiary from mom to myself. I was just curious to c if anyone else had the same situation going on. Thank u!

After I wrote that, I wondered if Medicaid waits until a person dies, then takes the death benefit except $15,000. Or do they require the surrender of the larger policy and purchase of a smaller. This wouldn't be much money, since the surrender value of most policies is not much.

Yes, Medicaid spend down requires the spend down of life insurance except for a small amount -- $15,000 if I remember correctly.

In our state you can use your money to prepay for funeral expenses but the NH does get the insurance policies as far as I know I mean use their money to prepay for a funeral-the nursing homes need the money to keep caring for people.

Is your parent already in the NH?

Has Medicaid been applied for?