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Loren
Loren, Attorney
Category: Estate Law
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Experience:  30 years experience in the practice of estate law.
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I transferred a life insurance policy to my son before I went

Customer Question

I transferred a life insurance policy to my son before I went on medicaid. I had a loan against the policy. Can I use my money to pay off the loan if I am no longer the owner of the policy.
Submitted: 1 year ago.
Category: Estate Law
Expert:  Loren replied 1 year ago.
Thank you for using JustAnswer. I am JudgeLaw and I will do whatever I can to answer your question and provide you excellent service.

You can, but since it is now owned by your son it may be treated as a gift to your son since it increases the value of the policy you have already transferred to him.

That means that it may be applied against your lifetime exemption to the extent it exceeds the annual exemption.

It is my privilege to assist you. Let me know if you need further information.  I hope I have helped you beyond your expectations in the service I have provided to you.  I am here for you.

Please remember to rate my answer when our communication is completed so I will be compensated for my time in providing you with the information you requested.

If you feel the need to provide a low rating, please stop and reply to me via the REPLY button with whatever issue or clarification you may need. I will happily answer your follow-up questions and assist you until I am able to explain the answer to your satisfaction. Please also remember that I cannot control whether the law is favorable to your situation, so please do not penalize me for having to deliver bad news.

Thank you.

JudgeLaw
Customer: replied 1 year ago.

the policy was worth $15,000 with a loan of $6,000. And a cash surrender value of $102. I am on medicaid. What do you mean by lifetime exemption.

Expert:  Loren replied 1 year ago.
Thank you Paul formthe additional information.

It is not likely something you need to worry about as the lifetime gift limit or exemption is $5.25 million. That is the amount you can give away before estate taxes kick in.

I hope this clarifies the answer.

Thank you.

JudgeLaw
Customer: replied 1 year ago.

I am more worried about the medicaid aspect. I have to keep my assets below $2000. If I have extra money can I use that to pay back the loan.

Expert:  Loren replied 1 year ago.
How old is the loan?
Customer: replied 1 year ago.

from 2007 I transferred ownership in 2010

Expert:  Loren replied 1 year ago.
Thank you for the additional information.

Since the loan predates the lookback period (5 years), I do not believe it would be an issue with Medicaid eligibility.

Thank you.

JudgeLaw
Loren, Attorney
Category: Estate Law
Satisfied Customers: 20787
Experience: 30 years experience in the practice of estate law.
Loren and 6 other Estate Law Specialists are ready to help you
Expert:  Loren replied 1 year ago.
Thank you, Paul, for your positive rating of my service to you. Let me know if you need more help or have future questions. I will be here for you. Just ask for me by name at the start of your question - "JudgeLaw" or use the following link (which you can bookmark in your browser):  http://www.justanswer.com/law/expert-JudgeLaw/
   

Best wishes and good luck to you.

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