Q: My mother died at 66 years of age without a Will. We were not going to open an estate because there were no assets. However, I found out my mother was the beneficiary of my grandmother’s insurance policy valued at $22,800. This was turned over to PA Department of Treasury, unclaimed property. For us four children to claim this life insurance, we must open an estate. However, in reading small estate law in PA, Medicaid needs to be put on notice if she received it. None of us knew of my mother’s personal affairs as all of us were estranged from her so it is possible she received Medicaid. We are unsure if it is worth trying to collect money from my grandmother’s life insurance that my mother was the beneficiary. Without the policy, my mother died without assets. Is there any advice you can give on what we should do in this situation? (Pittsburgh, PA)

A: Whether you proceed under the Small Estate Petition statute, or file for a grant of Letters of Administration, the Department of Human Services of PA must be notified. They will respond as to whether the decedent received Medicaid and if so the amounts they seek to recover under Estate Recovery. Under the PA Code, section 258.3 (Estate Recovery), life insurance proceeds payable to a decedent’s estate are subject to the Department’s claim. Life insurance proceeds payable to a beneficiary are not subject to the Department’s claim. The problem here is that this policy was not owned by your mother. She was a beneficiary of the policy who did not claim her proceeds for whatever reason. The proceeds turned in to cash after grandmother’s death. Had it been your mother’s policy, and there was a named and living beneficiary, I think you would be in the clear. The other concern is that since the proceeds have devolved to unclaimed property and lose their identity as insurance proceeds, they are viewed as cash. I would not throw in the towel at this point. I do not know the definitive answer on this without doing some research. You may want to consult with an estate attorney to see if it is worth pursuing. If an estate is opened and Estate Recovery files a claim for the entire amount, the estate can pay preferred estate expenses before paying Estate Recovery. These would be reimbursing family members for funeral expenses advanced, filing fees, attorney fees and an executor fee. It may be worth it. The attorney and the executor will earn a humble fee but perhaps someone who had no hope of being reimbursed for the funeral, which can be expensive, can now be paid.