LIfe Insurance Ownership

Mom has a 10k life insurance policy and the CSV is $2100.00. Mom is already Medicaid eligible. Ownership to life insurance was transferred to daughter and assigned to a funeral home at the same time to make this not a Medicaid asset of mom. All paperwork incl. the transfer paperwork and irrevocable/preneed funeral contract was submitted to the Caseworker immediately @ Medicaid recertification. Mom was still approved. This was no longer listed as an asset to mom. Caseworker never questioned and surprisingly, I thought they will do to transfer. In State of NJ, there is a funeral exclusion law for Medicaid recipients when spending down assets.


Due to above and if we want to really audit it, will there be a penalty for transfer or gifting imposed later?

What is to worst that can happen after mom passes?

Comments for LIfe Insurance Ownership

Average Rating starstarstarstarstar

Click here to add your own comments

Jan 29, 2015
Rating
starstarstarstarstar
Life Insurance Issues
by: Gabriel Heiser

I don’t understand why it was first transferred to the daughter, before the funeral home. If it went to the daughter, it would be a gift to her. However, since the caseworker approved the application, I suppose that that was not an issue.

If there was an understanding that daughter would transfer the policy to the funeral home—and indeed it was—then if it ever comes up that it was a gift transfer to daughter, it could be argued that it was a constructive trust and always meant to go to the funeral home, where it would be exempt.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Medicaid Questions.

Subscribe to
Estate Planning Hub


Your First Name


Your E-mail Address

We keep this private.



Follow the Estate Planning Blog.




--by Beth Heikkinen
Marquette, Michigan
I just want to thank you for this site. It answered my questions. I think many people that do research on the net take it for granted and when they find what they are looking for they forget "someone put time, money, etc into providing me with this information."

Thank you!


Like This Site





Visit Our Social Media Pages

Become a Fan of Estate Planning Hub on Facebook Follow EstatePlanningHub on Twitter Follow EstatePlanningHub on Google+ Subscribe EstatePlanningHub Video on YouTube

Get a PDF version of this website and its sister site here.