Can a nursing home take the life insurance, which is solely for burial expenses?

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Can a nursing home take the life insurance, which is solely for burial expenses?

My father-in-law is 88 years old, a WW2 vet and is living with his son and I in our home in Indiana. He collects SS and a small truckers pension. He doesn’t own any assets except for an older van. He has a permanent catheter in his bladder, but is still mobile and does drive not by our choice. He has a $8000 whole life policy that he pays on every month and my husband is the beneficiary. The only burial arrangements are that the plot is paid for and the closing of the grave is on a contract in my husbands name. He is starting to get more and more difficult and forgetfull lately and we are afraid that he will have to go to a nursing home.

Asked on November 30, 2012 under Estate Planning, Indiana

Answers:

Catherine Blackburn / Blackburn Law Firm

Answered 8 years ago | Contributor

The first thing you should do is consider filing for VA "Aid & Attendance" benefits for your father in law.  You can look this up on the internet to see what kinds of assistance qualifies and determine whether this will help you and your husband care for him (Medicare Part B, Medicare Supplemental Ins., hiring help in the home, etc., qualifies).  He may also qualify for a VA pension.  Several veteran's associations and local governments help people apply for these benefits.

As for the life insurance policy, this depends on how Indiana chooses to handle assets.  Generally, the cash value of life insurance policies count as assets if your father in law could cash it in.  Many states permit Medicaid applicants to designate certain assets for burial.  You would have to check with your Medicaid authorities or an elder law attorney about this.  Also, many nursing home business office managers know the Medicaid rules and may be able to answer this question.

I hope this helps.


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