Page 22 THE EVERETT ADVOCATE – FRiDAy, July 21, 2023 Cash Value Life Insurance Policies I f applying for MassHealth it is important to realize that MassHealth will count the cash value in a whole life, universal life or variable universal life insurance policy if the face value of the policy is greater than $1,500. This is important as the community spouse can have no more than $148,620 in countable assets and the nursing home spouse can only have $2,000 or less in countable assets in order to be eligible for MassHealth long-term care benefi ts. If the community spouse has two cash value life insurance policies and each has a face value of $800, then the total face value would exceed $1,500 thereby rendering the cash value of both policies a countable asset. If the cash value policies are owned by the spouse applying for MassHealth benefi ts, ownership of the policies can be transferred to the community spouse in order to reduce the nursing home spouse’s countable assets to less than $2,000. There is no disqualifying transfer when one spouse transfers countable assets to the other spouse. However, the community spouse’s total countable assets cannot exceed $148,620, including the total cash value of all of the life insurance policies. An advanced planning strategy might be to transfer ownership of the policies to the children in order to commence the fi ve year look back period. Each of your children could also be the benefi ciary of each life insurance policy. This will serve to remove the countable asset out of the name(s) of the parent(s) when you feel confi - dent neither of the parents will be applying for MassHealth benefits prior to the expiration of the fi ve year look back period. If the policies are paid up with no more required premiums to be paid, the life insurance policies can be transferred to an irrevocable trust as well in order to commence the fi ve year look back period. Keep in mind that since term insurance policies have no cash value, they are not countable assets for MassHealth eligibility purposes. The community spouse would certainly want to make sure that the children are named the benefi - ciaries of the life insurance policy and not the spouse who is entering a nursing home who is either applying for MassHealth benefi ts or who is already on MassHealth. Another option would be for the community spouse to name his or her estate as the benefi ciary of the life insurance policies (cash value or term) and include a testamentary trust provision in his or her Will that would provide discretionary distributions of income and principal for the nursing home spouse. Assets in such a testamentary trust would not be a countable asset for MassHealth purposes and income and principal distributions would serve to provide supplemental benefits to the nursing home spouse that would not be provided by MassHealth or any other governmental programs. With advanced planning, you can transfer ownership of any life insurance policy to an irrevocable trust in order to remove the policy from the countable resource pool. Five years after such a transfer, the cash value in any life insurance policy will no longer be countable. If the insured were to die, the death benefit would be paid to the Trust and the surviving spouse would be entitled to the income generated from the investment of the life insurance proceeds, but not be entitled to receive any principal. It is always good to review your life insurance policies in order to determine if any advanced planning strategies should be employed. Joseph D. Cataldo is an estate planning/elder law attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. 1. On July 21, 1775, the Battle of Brewster Island took place during a siege of what city? 2. The first automobile factory (in the early 1900s) in the USA was in what town in Massachusetts that is also the name of a color? 3. What northern geographic boundary takes into consideration the winter and summer solstices? 4. On July 22, 1980, AFTRA joined the SAG strike; what do AFTRA and SAG stand for? 5. How are Todd, Tutti, Stacie, Kelly, Chelsea, Krissy and Skipper similar? 6. What golfer was nicknamed “The Golden Bear”? 7. Reportedly, how many kernels are on an average ear of corn: 200, 500 or 800? 8. July 23 is National Vanilla Ice Cream Day; in the 1780s what U.S. president handwrote a vanilla ice cream recipe (believed to be the USA’s oldest recipe for ice cream)? 9. Who was the fi rst “witch” to be executed in Salem, Mass.? 10. The Major League Baseball Comeback Player of the Year Award was developed from a sponsorship agreement between MLB and what? 11. July 24 is International Self-Care Day; nationaltoday.com encourages people to practice self-care, even if only by doing what basic exercise? 12. How are Algol, Basic and C similar? 13. The world’s fi rst free public library that was supported by taxes was founded where: England, Germany or New England? 14. On July 25, 1936, a fi ve-night run of “Macbeth” – directed by Orson Welles – in Bridgeport, Conn., ended; it was part of the FTP of the WPA; what do they stand for? 15. What variation of whist has a New England city’s name? 16. The oval and round windows are in what part of the body? 17. On July 26, 1864, John Wilkes Booth met with coconspirators at what Boston hotel to plan to kidnap Abraham Lincoln? 18. What two U.S. presidents have been peanut farmers? 19. The fi rst Ken doll sold was wearing what? 20. On July 27, 1953, an armistice agreement was signed, ending what war? ANSWERS LIKE US ON FACEBOOK ADVOCATE NEWSPAPER FACEBOOK.COM/ ADVOCATE.NEWS.MA 1. Boston 2. Orange 3. The Artic Circle (It marks the southernmost latitude where on the Winter Solstice the sun will not rise all day and on the Summer Solstice the sun will not set.) 4. American Federation of Television and Radio Artists and Screen Actors Guild 5. They are the Barbie doll’s siblings. 6. Jack Nicklaus 7. 800 8. Thomas Jefferson 9. Bridget Bishop 10. Viagra 11. Take a walk 12. They are computer languages. 13. New England (Peterborough, N.H.; founded at Town Meeting in 1833) 14. Federal Theatre Project of the Works Progress Administration 15. Boston whist 16. The ear 17. Parker House Hotel 18. Jimmy Carter and Thomas Jefferson 19. A swimsuit 20. Korean
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