THE REVERE ADVOCATE – FRIDAY, JULY 21, 2023 Page 17 CASH VALUE LIFE INSURANCE POLICIES The extended family of the McCarricks and Gaff neys Ace McCarrick’s granddaughters, Caroline and Kate Hurley, are shown in the basketball courts dedicated to the life of their grandfather, Robert “Ace” McCarrick. Also pictured is Cole Nagahama. Players and friend of Revere’s “Ace” McCarrick: Todd Santora, Bill Myers, Joe Mullaney, Michael Micciche and Paul Buonfi glio, III. 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 I Attendees at the dedication: Susan, John and Nancy McCarrick-Hurley. Attending the dedication: Northeast Metro Tech School Committee member/candidate for Revere School Committee member Anthony Caggiano, candidates for Councillor-at-Large Alex Rahimi, Bob Haas III and Don Martelli. It was standing room only at the basketball courts, all to pay tribute and honor Revere’s own Robert “Ace” McCarrick. 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 confident 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 benefi ts 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 benefi t 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 Master’s Degree in Taxation. Former players, and lifelong friend of McCarrick, Lenny Orlandello, Ward 2 City Councillor Ira Novoselsky, Victor Dinarello, Dave O’Donnell and Bill O’Donnell Like us on Facebook advocate newspaper Facebook.com/Advocate.news.ma
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