Can Title 19 claim life insurance proceeds?

UPDATED: Aug 23, 2011

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Can Title 19 claim life insurance proceeds?

My mother is currently in a nursing home and on Title 19 in Wisconsin. She has a life insurance policy for $10,000 with me as the beneficiary. Upon her death, will I get to keep the money or will Title 19 be able to get it?

Asked on August 23, 2011 Wisconsin


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Under the laws of all states in this country as well as Internal Revenue Service regulations, a life insurance policy stating a specific beneficiary as the recipient of the policy is not an asset of the deceased person's estate unless the decedent names himself or herself as a beneficiary under the life insurance policy.

This is why most estate planners when they are dealing with life insurance policies do not want them to be part of the estate of the person on whose life is being insured.

Life insurance policies naming third party beneficiaries are considered "gifts" to the third party beneficiary and are deemed a taxable event for income tax purposes.

If you are the beneficiary under your mother's $10,000 life insurance policy and she passes away with the policy as designated, the $10,000 pay out is yours to keep and Title 19 has no entitlement to the insurance policy proceeds as designated.

Good question.

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