Estate Administration Advice: Funeral Reimbursement

Location: NY State

My mother passed away at the beginning of this year. She did not leave behind much. A personal bank account of under $15k from social security payments through the years. No property, car, investment accounts or anything tied to her name. She had no debts at the time of her passing.

Before my mother’s passing, she was residing at an extended care facility covered by medicaid. She was there for about a year and 2 months.

My mother had a life insurance policy with my father as the beneficiary and myself as the secondary beneficiary. I have no siblings (only child) and my father passed away decades ago so I am the sole beneficiary on the life insurance policy.

She had funeral services that were first held at Funeral Home A, then flown to Funeral Home B, where she was laid to rest. My mother had prepaid some funeral services (but not all) years ago at Funeral Home B.

When the time came to pay the bill for Funeral Home A, I arranged and signed off on Funeral Home A receiving payment directly from the life insurance policy and I would receive the remaining amount. This was to ensure quickest payment method as delay in payment would result in accrued interest on the money owed. I have paperwork on Funeral Home A receiving direct payment from the life insurance policy, the paperwork signing off on them receiving the payment directly from the life insurance policy, and paperwork with the verbiage stating there will be accrued interest on the unpaid invoice.

The flight to Funeral Home B was purchased by the funeral home director at Funeral Home A. I sent him money for the flight via Zelle as the funds were needed quickly. He sent me screenshots/paperwork/emails on the flight information and related receipts. The flight is also recorded on the final invoice for the funeral services.

Funeral expenses at Funeral Home B were paid by myself through online payment. I have the invoice and related documents showing payment for this as well.

Since I am the only child, I am the executor of the estate. Her funds from her personal bank account has been moved to an estates account.

Recently, I received a letter and questionnaire from HMS, a 3rd party liability contractor for the Office of the Medicaid Inspector General. This letter is regarding potential medicaid estate recovery claim. The letter says that I am able to be reimbursed for funeral expenses before any medicaid claim to the estate.

So my questions:

1. Am I able to reimburse myself for the expenses at funeral home A, despite funeral home A being paid directly from the life insurance policy? From my understanding, since funeral home A is not named on the life insurance policy, and i signed off on them receiving the payment directly, I should be able to reimburse myself for that expense.

2. For the medicaid questionnaire, there is a section asking about the estate account number and funds inside. If I reimburse myself back for all funeral expenses (including funeral home A), there will be no money left in the account. How should I fill out this section of the questionnaire? Give them the bank account number but explain there is no longer any money remaining? Clarity and best practice on this would be helpful

3. Any guidance and/or advice on making sure I do everything correctly as both executor and someone putting in a claim on reimbursement of funeral expenses. Write a claim to have on file then write a check from the estate account to myself and make sure I leave a paper trail? I want to be ready if medicaid asks to see everything.

Would appreciate advice and guidance on this. Thanks for your time.