Q: My daughter is beneficiary of a life insurance policy. The owner just went to a nursing home on hospice. The Executor wants to cash in the policy for the cash value for Medicaid. The owner of the policy is of sound mind. What are our rights? (Pittsburgh, PA)

A: The owner of the policy can do as he or she wishes. It is not the decision of the Executor. The Executor is appointed in the will and only has legal authority after the owner dies. If this person is Agent on a valid Power of Attorney signed by the owner, he or she may have authority to do this if the language of the POA allows it. However, if the owner is competent to make this decision, the Agent must abide by the owner’s wishes and cannot act to the contrary. Perhaps the Executor thinks the owner needs to liquidate this policy in order to spend down for Medicaid? Under section 258.3 of the PA Code, life insurance policy proceeds payable to a living beneficiary are not subject to the claim of the PA Department of Human Services, who manages the Medicaid program in PA. My thought is that if this “Executor” person is trying to do Medicaid planning without the assistance of a lawyer, he or she is taking a risk. Advise this person to seek legal help from an attorney versed in Medicaid regulation.