Q: Ohio Medicaid Estate Recovery / is benefit from term life ins. no cash value paid to beneficiary eligible for recovery.
Policy had no cash value, and was paid out directly to the beneficiary / not to the estate. Beneficiary is the child of deceased, over 21 and not disabled.
Received letter from Medicaid Asset Recovery. Want to know if this life insurance benefit is eligible to be taken by them.
A: Ohio Law is not crystal clear on this. On the one hand, the Estate Recovery statute claims a very broad right to any asset held by the Medicaid recipient at death. On the other hand, the Ohio statute regarding life insurance says that it is usually protected from creditors, as long as a beneficiary is named and the beneficiary is not "the Estate" of the deceased. It has been my experience that the Ohio Attorney General for Medicaid is not attempting to collect on life insurance, as long as there is a beneficiary named on the policy. However, Ohio sometimes subcontracts their Medicaid Estate Recovery work to individual law firms. These firms may be unaware of the subtleties of the law and may make a demand for recovery of life insurance. In my opinion, an Elder law attorney should be consulted before responding to any letter from the Ohio Attorney General or the law firms working on their behalf.
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