Spouse owns a cremation policy that covers the opening of the grave, and a few death certificates, transportation from crematorium to grave site and misc. expenses. It does not cover the transportation from either the hospital or SNF to the mortuary or crematorium. This must be paid upon his death. I'll have to pay the cost of his probate/attorney and whatever misc. expenses come up.
I own a partially paid 20K whole life policy on his life.
My husband is the insured, I am the owner, and I am listed as the beneficiary. Neither the funeral home or the state are listed as beneficiaries.
He has not died, but I figure it's time to clarify this detail.
I would check with a CPA because I think, (laws may have changed) that when life insurance is purchased that way it is subject to estate taxes even spouse to spouse.
I assume that this policy came up during the Medicaid application? If not, they may get ugly.
Yes, I'm 100% owner of the 20K policy on husband. I'm listed as beneficiary.
My husband's cremation policy proceeds are directly payable to the funeral home. From there, I must pick up costs. We figured several years before Medicaid that having 20K payable direct to me was the best way for me to manage/control expenses that can't be predicted ahead of time.
I don't know what the shortfall will be after the home receives all of my husband's policy proceeds. I expect to need some of the 20K for immediate expenses.
I don't know if any left-over funds are owed to Medicaid. I don't know if remaining funds are considered part of his estate or if it's considered my money since I'm the policy owner and beneficiary.
I don't know anything about life insurance and taxes. Given the 20K is payable to me for his death, I don't know if it's even considered income. We have always filed jointly so it would be accounted for that way, unless a CPA told me to file under a different status.
Given all the other items to deal with during the Medicaid shuffle, I'm just now looking into this part.
I think you also make a good point because we don't know what laws may change. I leave open the possibility that the entire scenery can change by the time tax reforms are settled.
I am surprised that there will be a charge for transportation to the funeral home, my nephew was transported from the medical examiner to the crematorium as part of the cremation. Can you check with other facilities to find out if that is normal?
He has nothing left to gift. The house is in both our names so it does not need to be probated. Probate is an expensive process and would not help in any distribution or payment. To meet my needs, there is no need for Probate and the house and bank account passes to me. In filing Probate here, one is required to publish notices in the paper for several weeks, marshal all property, and wait for the hearing. The state has all our information and it's built-in claim, so as I see it, filing Probate would not change the outcome.
Assuming the contract was correct as I'm told i.e. no additional monies are needed to get him taken care of upon death, I will be able to use money to pay miscellaneous bills and hopefully keep the remainder for me and not have to give it to the state.
Let's hope you get all the 20k to help you live.