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Loren, Attorney
Category: Estate Law
Satisfied Customers: 34438
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

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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.
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.

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Thank you.

Customer: replied 4 years 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.

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.

Customer: replied 4 years 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.

How old is the loan?
Customer: replied 4 years ago.

from 2007 I transferred ownership in 2010

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.

Loren and 2 other Estate Law Specialists are ready to help you
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):

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