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When Mom applies for Medicaid in the future, will Medicaid consider she gifted assets since the policy did have some cash value?

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I guess changing ownership is what is confusing so I looked it up.

"If you own a policy on your life, you may want to transfer ownership to another individual (e.g., to the beneficiary) to avoid inclusion of the proceeds in your estate."

So now a little clearer why the ownership was changed. I also read that ownership only means that person has control over the policy.

So, if Dad was the insured and he passed and beneficiaries received the money, there is no longer a policy. So nothing to claim when Mom applies for Medicaid. She did not benefit in any way.
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Worried

"It was originally dads policy and he signed it over to mom. Kids are beneficiaries. Mom is not. Mom is just the owner of the policy"
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JoAnn29 Nov 2020
Worried, disregard this. I thought it was deleted. 😊 It was unfinished. See my last post.
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Do we all understand dad was the insured person here? It was HIS life that was insured. He has died so now the life insurance payout will be paid to the beneficiaries of the life insurance policy who are the CHILDREN. The OPs mother is NOT the beneficiary. The insurance company will not cut a check in her name.
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If mom actually is the “owner” it’s hers to do what she wants with it. So if it has a cash value she can cash it out. I’d be concerned that if she applies for LTC Medicaid, and it has a cash value, they (Medicaid) will consider it an non exempt asset & required her to liquidate it.

Curious22, is this perchance a GUL type of life insurance policy?
So not actually term life insurance or whole life insurance policy but Group Universal Life. Maybe your dad got it from his old firm as a perk? So he was the original owner as that’s how the company did it? So could it be a GUL?
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worriedinCali Nov 2020
Igloo how can mom do what she wants with the policy? She’s not the beneficiary and the insured party has died. Doesn’t the money now go to the beneficiaries? Mom can’t cash out the policy.
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I don't know Worried. He handed the policy over to her. How does that work, his name comes off and her name goes on? If so, then the policy is hers and if it has cash value, Medicaid will ask that it be cashed in?

Note, I am asking questions.
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FloridaDD Nov 2020
I am still curious too.  If mom were the owner, she should have had the right to change beneficiaries.   Not certain if she is regarded as having made a gift by leaving them as beneficiaries.   Presumably, if she owned a policy with cash value, she could have sold.   Not certain if completed gift has been made
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It was originally dads policy and he signed it over to mom. Kids are beneficiaries. Mom is not. Mom is just the owner of the policy
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worriedinCali Nov 2020
My answer stands then—the $ from the policy wasn’t her asset and won’t affect her eligibility. It would have been a problem if she had been the beneficiary.
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If the kids were the beneficiaries then the insurance money is not your mother’s asset so it won’t affect her Medicaid eligibility. It was never her money to begin with and she didn’t “give” it away.
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This is confusing.

Did Mom have a policy on Dad? Or she has a policy and he had a policy?

Was Mom first beneficiary on Dads policy? Were kids secondary?

If Mom was primary on Dads policy and gave you money then yes its a gift and can effect Medicaid. If you were equal beneficaries then only her portion is an asset.

Really need more info.
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