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What happens to the money in a Workers' Compensation Medicare Set Aside Account if you die?

San Francisco, CA |

What happens to the money in a Workers' Compensation Medicare Set Aside Account if you die? Can a family member oversee the account if they meet all the government guidelines? Can you put this in a will or estate that if you die you can give the money to someone or donate it to a charity?

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Attorney answers 4

Posted

In California W.C., most MSA's are self-administered. The MSA is located at your local bank in The City in an interest bearing account in your name....no designation as MSA or anything else...just your name. When you die, it would act just like any other bank account you might have. You may have a right of survivorship in the account, you may have it pass through your will, you may have it pass through the laws of intestacy if you don't have a will. It becomes part of your estate.

Good luck.

Posted

That may depend on whether the MSA is self administered or handled by some other party. Ordinarily, the self administered MSA has a right of survivorship. This is something that is addressed in the settlement. You can negotiate a right of survivorship even if the MSA is not self administered.

Louis Joseph Michelsen

Louis Joseph Michelsen

Posted

A self-administered MSA will go to the beneficiary upon death. However, if an annuity is the basis of the MSA, meaning the insurance company took out one to pay future medical benefits, it will stop and pay nothing unless this too specifically carved out survivorship. Most of my clients will never be able to spend all the money set asside these days, so surviorship option is crutial.

Posted

Almost all bank accounts have a Pay On Death (POD) beneficiary. If the remaining funds are in the bank account, your designated beneficiary would be entitled to them. If they are with a Trustee, there is likely a beneficiary provision, also.

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Posted

I am not 100% sure of this, but I believe medicare has up to 6 months after the death to collect any funds from the MSA account, even if self-administered. A very reputable WC attorney told me this.

Someone at medicare/CMS should know, might want to try and contact them.

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