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Estate Recovery
When a Medicaid recipient receiving any of the above long-term care services dies, Medicaid seeks to recover certain expenses. There will be a claim filed against the estate. Under certain circumstances, estate recovery may not apply. Your local County Department of Social Services (DSS) can provide more detail information.
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wamnanealz, check with an eldercare attorney. maybe the face value is low enough you can keep it, maybe there is a way to change ownership or beneficiary so it does not count - do you have no SSI or any other source of income or savings at all??
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md bases the property taxes on your income, if you have a low income you don't pay anything
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Does he really need to go to a nursing home? If a board and care home is adequate for his needs, I might guess he could afford it for $3500 a month in NC. Nursing homes are needed if you cannot move from a bed or chair without 2 people helping you and/or if you need a registered nurse administering meds. If only one can help, the B&C may be enough, and nay afford better care and privacy than a nursing home with several room mates.
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It costs anywhere from $70,000 to $85,000 a year to maintain ONE nursing home patient. If he is not on Medicaid, you will have to ask an eldercare attorney because it is complicated with a five year lookback law. $3,500 a month-that's better than most--he actually can live quite well in an assisted living facility but if he needs more intense care, you will need to see an eldercare attorney.
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Kallen's question shows us the many different categories of assets that are listed in every Medicaid application. In my state (Massachusetts) the Medicaid agency grants a free pass to 1 life insurance policy if it has a Cash Surrender Value under $1,500. You can Google the regulations for Kallen's state (North Carolina) and find that her state may be more generous with cash surrender value.

If the life insurance policy doesn't have a cash surrender value ((some policies that were provided and paid up by employers before the person retired don't have C S V)) then it is not even counted against you. Term life insurance may not have a cash surrender value, but then how will you keep paying premiums to keep the policy in force if your income is taken to cover the nursing home patient paid amount?

In my state (Massachusetts) there are several ways the cash surrender value can be reduced to bring the policy into compliance.

Also, if there is a spouse living at home, a life insurance policy could be included in the asset allowance for the spouse ((called the Community Spouse Resource Allowance in my state, Community Spouse Resource Protection in some other states)).

There's so much to consider when applying, it is usually a positive cost-benefit decision to hire help with the application and asset planning.
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If the policy is worth $50K or more and the person owning it wants to use it to help pay for private care at home or in assisted living (more amenities than the nursing home w/ all those roommates), there is a way to stop making your payments and turn it into an income stream paying your long-term care costs.
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Sounds like both you & husband will be relying on welfare for not just nursing home, but CS will also not have enough to live on after hubby dies (unless his pension has a survivor benefit). 15,000 is not going to last very long if that's all you have. I sincerely hope you contact a Medicaid Planning Attorney who can assist with the Best Time to apply, as well covering burial expenses for both of you, and give a best case scenario for how wife can live after hubby passes. So sorry you are in this predicament--if he gets 3500 pension he must have had a wonderful career somewhere (I am jealous, I receive no pension whatsoever and my spouse's is nowhere near 3500. These days people have to provide their own.....).
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if you have to cash in policy to pay for NH care is that money taxable? the policis are paid up
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You may borrow money against the cash value of your policy at any time and for any reason assuming the contract allows this. Cash from a life insurance policy is usually not taxable. Using it to pay for healthcare should not be taxable either. Cash proceeds may be taxed only if they exceed the amount you've paid in. Depending on the policy, you may be able to surrender it tax-free to pay for long-term care. If over $50K and the insured has 5 yrs or less to live, contact LifePlans for an estimate of the long term care benefit they can provide tax free. They can give you this info over the phone and at no cost.
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I am authorized LIFE CARE FUNDING AGENT :
ANY Policy with Face Value (death benefit over $50,000) can be EVALUATED.
Generally the LE (Life Expectancy) is less than 5 years, It is an approved Medicaid Spend down,! Most often is a better option than asking the insurance co for cash value!
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3500 a month plus his Social Security will cover most of the nursing home. If the AARP ins is owned by him, and has cash value, it will also go towards his NH bills. If he owns a home and/or business and there is no Community Spouse that too will go towards the bills. He can still own a car if he still drives but the insurance, gas etc expenses will not be affordable so essentially his car will go too.
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The policy if in force and with a Face value of over $50,000 can be converted to a LTC benefit. which will yield more than a Cash value surrender, however you'd have to provide me with more details,see my profile if you want to 'talk" to me offline.
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