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Does Medicaid Have a Right to My Late Father-in-Law’s Life Insurance Policy?

  • December 29th, 2020
Q
My father-in-law had dementia and had to go into a nursing home after his wife passed away unexpectedly. He owned no property (house, vehicles, or savings, etc.). He applied for Medicaid to pay for the nursing home. As far as we knew, he had no life insurance, but when he passed recently, we found out he did in fact have a policy. He worked for and retired from the U.S. Postal Service years before going into the home. His late wife was the beneficiary on the policy. My wife was sent forms to fill out about living relatives. The only living relatives are my wife and her nephew, and the insurance company cut a check to both of them. Are Medicaid or other creditors entitled to the funds that the insurance company paid out? Did or does this money, which is less than $15,000 total, have to go through probate?
A

The answer depends on the life insurance company and state law. The first question is whether the insurance company is requiring the probate of your father-in-law’s estate to disburse the funds. If not, then the Medicaid agency probably has no claim. On the other hand, if the insurance company is requiring probate, then you’ll have to look to state law. In Massachusetts, for example, the state Medicaid program must receive notice of every probate and may submit a claim. However, estates are permitted to exempt $10,000 from such a claim. If the insurance company does require probate administration, you should probably check with a local elder law attorney to determine whether it’s worth the trouble to proceed. To find an attorney near you, go here: https://www.elderlawanswers.com/elder-law-attorneys

 

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Last Modified: 12/29/2020

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