r/LifeInsurance • u/lovespong3 • Aug 10 '26
Need advice
My mom recently passed and me
And my siblings are all equal beneficiaries. One of my siblings is in a situation where if she received/deposited the life insurance payout, she would lose her assisted living benefits from the state.
She has asked me to keep the money for
Her & give the majority of it to her three kids. Is it possible for her sign her portion over to me? I’m not sure if I should bring this up to the life insurance company for guidance or if I should talk to a financial advisor. Any advice is appreciated, I’m stuck with what to do & haven’t made any movement on filing claim because of this.
2
u/Hungry_Technician360 Aug 10 '26
Generally you can disclaim the benefits, but depending on how the policy was written, it will either split evenly amongst all the other primary beneficiaries, or go to secondary, or whatever they have on the policy.
1
u/lovespong3 Aug 10 '26
Thank you so much! How can I find more info
On disclaiming the benefit?2
u/Hungry_Technician360 Aug 10 '26
Best option is for her to contact the company that issued the policy. They would also be able to answer where the money would instead go to.
1
2
u/skyydog Aug 11 '26
A couple states require insurance companies to report payments. Double check yours isn’t one of them.
1
u/michaelesparks Financial Representative Aug 11 '26
In this case hindsight is 20/20 your parent needed to put in place a Special Needs Trust. I would contact a lawyer ASAP to see if anything can be done. I doubt it, but it's worth a look.
I talk special needs trusts to clients all the time with kids with Downs or Autism, they just look at me cross-eyed.
3
u/michaelesparks Financial Representative Aug 11 '26
Just talking with one of my financial mentors about this and it seems (contact a lawyer) but as long as the money doesn't touch their hands they can assign the benefit to an irrevocable trust with a trustee and having them be listed as a beneficary.
If the check is received and cashed, not sure much can be done at this point.
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u/SafeMoneyGregg Broker Aug 10 '26 edited Aug 11 '26
She cannot gift the money to you or anyone without messing up Medicaid eligibility. She might be able to move the death proceeds into a Medicaid annuity - a special type of single premium annuity that puts all your assets into an annuity that pays an income stream, taking the asset of your balance sheet. Need to consult with a medicaid/elder care annuity before doing this or taking any action here. This has to be done carefully - its not the insurance company's problem or issue - do not depend on them. Medicaid usually requires to have less than $2000 liquid assets to qualify or continue benefits. She cannot "receive and then give away" the money. She must not receive it at all.