Medicare and life insurance between multiple people

[Stephen Williams]

This is situation is a bit on the complicated side but her goes. My uncle had a massive stroke in 2009 and my aunt is now his guardian. My uncle is a veteran and on Medicare. His long time girlfriend has just passed away and her, herself was on disability and Medicare. When my uncle had his stroke she took out a $10k life insurance plan on him and had been paying the premium until her death. She had said she set it up to go specifically to him. I had always been told anyone on state or federal help would get any assets associated with them taken to pay back what the government on either the state or federal level had spent on them the duration of the benefits given. I assumed that because she will no longer be making the payments it would just be cancelled but then found out my aunt had been helping with the payments. So my question is what happens to the life insurance?

 

[DHK]

The life insurance contract on your uncle that his girlfriend purchased is considered your uncle's girlfriend's property. The ownership of the contract would either be transferred to a successor owner as outlined in the policy, OR via will or trust OR via probate court. If there's an executor for her estate, that would be the person who would be coordinating her affairs.

It would probably not be wise to make your uncle the owner of the contract because, as you stated, benefits may be recaptured by the state/federal governments. Generally speaking, property is distributed to a spouse, then next-of-kin. If she has kids, it's possible that the ownership of the contract could go to them.

This is not legal advice, but you do need legal advice - or rather, whoever is settling the estate of uncle's girlfriend's estate may need legal advice.

Not directly about your situation, but close enough: