Additional Legal News ... You can Use

Question: Can a long-term care insurance policy be owned by an (irrevocable) trust? The goal of having this done to have the trust pay benefits directly to a facility so the actual person won't lose VA access to whatever care VA covers. It seems that if one had income from a policy reimbursemnent, it could mean they couldn't get the VA coverage.

Answer: To answer this question, our expert spoke with the VA to get a more definitive answer, but they didn't have an answer either without consulting the local eligibilty office (so the final outcome could depend on where the individual lives).

A long-term care insurance policy can be owned by an irrevocable trust if the carrier allows 3rd party ownership. That being said, this may not accomplish what the client wants. I assume the client is concerned that the LTC benefits would disqualify him or her from medical benefits (as the VA nursing home is free). If this assumption is correct, are the client's VA benefits dependent upon low income? If not, the benefits should have no effect on eligibility. If the benefits are dependent on low income, it does not appear that the application asks for such payments in the income section, however, they should contact the local VA eligibility office to definitely answer that income question.


Question: If a single woman buys LTC insurance and then later gets married and the spouse buys coverage, is the spousal discount applied to the second policy? Or, how does it work?

Answer: With most carriers this is how it would work. Ms. Smith purchases coverage with carrier "x". When married and Mr. Jones gets coverage (also with carrier "x") Mr. Jones' policy will be issued with the spouse discount. The new Mrs. Jones (Smith-Jones if you prefer) will have the spousal discount applied as of the effective date of her (new) husband's policy. Rules will vary from insurer to insurer and because the spousal discount can be so significant, it is worth checking this out in advanced.