How do I legally turn over my brother's whole life policy to funeral home to eliminate it as asset to qualify for Medicaid?

Igloo, who often responds here may have an answer for you, but whole life insurance often does count as an asset, and I don't think you can "turn it over". If there is a POA involved here you can prepare funeral expenses out of your father's accounts until before they are depleted, I believe. I hope other responders have answers for you, but the best answers in your own area will come from professionals such as Elder Law Attorney who are familiar with your State's rules on Medicaid.

That NH financial rep is not exactly accurate in what they told you.
-Whole life policies if they have a cash value over 2k, have to be cashed in as the $ will take them over the nonexempt asset max.
-GUL policies tend 2 follow Whole Life rules.
-Term life does NOT need to be cashed out. It is only the face value of the policy that Medicaid should be looking at. Most Term is low like under 5k / 10k. Often it’s $ 1,000 face value. But it only is worth something after death. It legally is not an asset woth anything till they actually die. What happens with Term seems to be interdependent on the amount and the beneficiary indicated on the policy….. it seems to be that if it’s over 10k or so, then Medicaid will require for the state to become a beneficiary. So state gets term life policy pay out $ first & foremost to repay any $ Medicaid paid & if there us $ left then it goes to the other beneficiaries.

IMO what they asked you to do (turn policy over to them) makes the facilities life easier & bottom line healthier. I’d be concerned that if it’s a bigger amount of $ in the policy, that they tag a mo or two of private Pay from the $ then start Medicaid once it’s little left.

He does NOT need to sign over the policy to NH. He can sell it & use the value in the $ to buy a preneed funeral & burial policy. There will be a ceiling as to price of a funeral & I bet a good Funeral home will know what it is. IF it’s $8500 and his policy is $10k value, he will get a check back from FH for $1500.

He also can on his own request a cash out on the policy from the company. Just what & how done kinda depends on it’s value, it’s called a viatical settlement. There’s a little cottage industry of investors who buy policies, but it’s very interdependent on the amount of $ in the policy as to know much interest investors would have in buying it. I have a friend who does these as an investor, but she needs it to be a minimum 300/500k policy & the pay out is tied to IRS life estate tables and then the specific disease they have, it’s pretty cold & calculated. Viatical got used a lot when AIDS first happened as many guys had large life insurance policies as part of perk of their job and viatical sold them to afford care, afford thier apartments. But I digress….

Under LTC Medicaid rules, He is allowed to have a max of $ 2,000.00 in nonexempt assets. So he can have his own bank account with his nonexempt $ in it. If he is getting a monthly income (like social security check ea mo) direct depsited into a bank account, he can continue to do that and then he or you as his DPOA write a check or ACH the facility each mo the exact amount that is his required copay by Medicaid to the facility. He will be allowed to keep a smallish amount of $; it is called a PNA aka Personal Needs Allowance. pNA vary by state, most have it at $50 - $60. The exact PNA is his to keep, the rest must be paid to NH as his copay. Has anyone explained the copay to y’all?

I've found the NH will want all funding sources turned over to them…. so they will heavily imply you must Sign over any insurance policy’s, & let them become the representative payee of the individuals SS check. But it does NOT need to be done. For some folks it’s easier & so it’s done. But again it doesn’t have to be done.

The PNA $ and any money in thier bank account must not go over 2k. So you do need to make sure that happens should he keep his bank account and pays the NH each mo his required copay. He can have the bank account as POD aka Pay on Death to you or whomever. If it’s POD it transfers ownership outside of probate so not a part of his estate for any Medicaid recovery after death. If you r a signature on the acct, bank has your ID so it will likely be easy to get it over to u. This $ you use for funeral incidentals, like florals, which are NOT included in preneed, or use towards a celebration of life event.

I so feel for you as I had a cousin w1950’s polio. Their little lungs give out

What I think is going on here is your allowing the NH to apply for brother's Medicaid. The NH takes nothing. No insurance policies, no homes. Medicaid is requesting the info. You only cash it in if it has a cash in value. If its an employer insurance, does not need to be cashed in because the employer is paying the premiums.

My Mom had two small policies, 2k and 5k. They were probably for her funeral expenses. I did cash them in because she was getting dividends on them that were higher than the policies. I took the money and set up a funeral trust with our Funeral director. Medicaid allows this.

After some of the stories I have read on this forum where NHs were involved in a Medicare application, I am so glad I went to Social Services and sat down with a case worker. You are more involved and understand how the application works. The caseworker filled out the form and I supplied the information. I was given a check off list and provided everything on it. Confirmed with the Caseworker that he had everything he needed and Medicaid started the next month. My State gives you 90 days to place the person, spend down and get info needed to them.

I would not trust a NH employee to know all the in and outs of Medicaid. My cousin was just told by Office of Aging to not allow his Moms NH to fill out the application. But if you choose to use them, find out who the caseworker is and keep in touch with him/her. Especially if what your told doesn't sound just right.

If you apply for Medicaid now, there is a 3-month reimbursement or retroactive period option for the out-of-pocket co-pays.

I am dpoa and decided to cash out mom's life insurance policy which would have covered only funeral expenses. (Any larger CV could be sold or taken over by myself as mentioned in a post here). The funeral home that mom preferred would not take over the policy. So the at-time-of-need expenses (burial plot opening/closing, inscription) and preplanning expenses (funeral package and purchases) were paid by the pay-out. The only remaining expenses will be for a reception and flowers, etc. It is somewhat of a relief this is now done. Once you clear this financial hurdle, care will remain the focus.

SouthernSon, if he’s on the $185 a day co pay, I bet he is still on a MediCARE benefit. Not Medicaid but Medicare. It could be that he was discharged from a hospitalization and went into the NH on a rehab discharge, or could be another MediCARE transitional care benefit.

the MediCARE benefits are time limited. Usually it’s first 20/21 days are covered at 100% then all days up to 100 at 80% with the individual responsible for the 20% copay. The $185. But when it ends will be dependent on his health needs. Oils be day 35 or could be day 93. Once it’s in his chart that he is not a “patient on rehab but instead a LTC resident, MediCARE will stop and that’s when LTC Medicaid can enter.

If he was a “dual” - that is on MediCARE and Medicaid- but still living in the community, that Medicaid program (community based Medicaid) will not cover long term living in a facility. He will need to apply for LTC Medicaid and this program has the tight financial requirements. Basically 2k in nonexempt assets. And that whole life policy counts as an asset as technically it can be cashed in. Please pls make sure it is whole life. If this is an older policy, it can be hard to decipher term vs. whole life. I will say this, IMO, if it s a very modest policy, it may be best to do what is simplest and let the NH have it… 5k let em have-it, 50k thats worthwhile to work on to find a settlement.

It is so beyond good you are there to be his advocate. Secondary polio survivors are forgotten in our collective history.