Ask the Expert: Does Medicaid Cover Prepaid Funerals?
Published: Fri, 05/17/13
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Ask the Expert- Your Elder Law Questions Answered by Evan H. Farr, CELA |
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Ask the Expert: Does Medicaid Cover Prepaid Funerals?
 Q. I am considering whether to prepay for my funeral to save my family the expense and burden during what will be a tough time, but had a few concerns about it first. I am interested in learning more about prepaid funeral contracts and whether Medicaid pays for funerals, at all. If not, is it possible to set aside money for this in a funeral trust and be exempt? Based on question that was asked on Avvo by a resident of Clarksville, VA A. Medicaid itself does not pay for funerals, but it does have
rules that allow you to set aside money for your own funeral, burial, or
cremation without having that money "count" as part of your assets
when Medicaid determines your eligibility for long-term care coverage. Medicaid
Regulations permit the ownership of prepaid funeral arrangements if funded
totally by an irrevocably-assigned life insurance policy and/or by an
irrevocable trust that is properly established by a funeral home. The amount of money you spend on
properly-established prepaid funeral arrangements will be an exempt asset in
connection with Medicaid. Medicaid
regulations permit the Medicaid applicant to purchase prepaid funeral plans not
only for the Medicaid applicant but also for his spouse (and his or her
children, if desired), but again it is critical that these pre-paid
arrangements are set up properly using either an irrevocable life insurance
policy, a special type of irrevocable trust, or both.
Q: My second question is whether Medicaid imposes a limit on how much you
can spend for prepaid funeral arrangements.
A. No. There is no limit on the amount of money
that can be spent on properly-established Medicaid-exempt prepaid funeral
arrangements, but in reality, prepaid burial arrangements typically cost
between $8,000 and $12,000 per person. Prepaid cremation arrangements
typically cost between $3,000 and $5,000 per person. When the proper funding
vehicles are used to prepay a funeral, the value of the prearranged funeral
contract and the funding vehicle are excluded as a countable resource in
determining SSI & Medicaid eligibility.
Most funeral homes will tell you that they have an appropriate funding system in place, but in actuality many funeral homes do not use appropriate funding system, which you only find out when you apply for Medicaid and are denied. The Fairfax Medicaid Law Firm of Evan H. Farr, P.C. has certain funeral homes that we work with that do use an appropriate funding system, and we therefore refer our clients to these funeral homes. However, even if you use a funeral home that uses an appropriate funding system, the funeral director must still fill out the forms properly, and there is significant opportunity for error in completing the forms. Accordingly, for our clients, we ensure that our office reviews the completed forms before our client signs them. Prepaying for a funeral has many benefits, including locking in prices, relieving the burden of family members during a time of emotional stress, and ensuring that your personal desires are carried out according to your wishes. Additionally, purchasing prepaid funeral arrangements is just one of dozens of different Medicaid Asset Protection strategies that someone applying for Medicaid can use to legally and ethically protect assets from having to be spent down in connection with nursing home care. With proper planning, families can protect most or all of their assets and obtain Medicaid assistance without having to deplete their life savings. Always contact an experienced Elder Law Attorney, such as Certified Elder Law Attorney Evan H. Farr, before you make any prepaid funeral arrangements or take any other steps towards filing for Medicaid. Medicaid is the most complex area of law in existence, and one mistake can have tragic consequences for you or your loved one. Our firm serves clients throughout Virginia, Maryland, and DC, and would be happy to assist you. Click here to view a short video and read more about Medicaid Asset Protection. Call 703-691-1888 to make an appointment for a free consultation with Evan H. Farr, CELA to talk more about your specific situation.  Critter Corner- Featuring Big Red the Betta Fish
 Dear Big Red, I went to a seminar at The Fairfax Elder Law Firm of Evan H. Farr, P.C. and I have an appointment to get started on incapacity planning for myself and my family. I am a race car driver and if something happens to me like a major car accident, I do not want to be hooked up on machines. How can I ensure my loved ones and medical professionals know where my documents are and how to access them? Thanks! Dan Geruss
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Dear Dan,
Incapacity Planning documents, including a Financial
Power of Attorney and Advance
Medical Directive, only do what you want them to do if
your loved ones know they exist and can locate them when needed.
You mentioned that you don't want to be hooked up to machines when you are in an end-stage medical condition. If your loved ones or medical professionals cannot find your Advance Directive, the burden is on your loved ones to decide whether or not to begin or continue life support. At The Fairfax Elder Law Firm of Evan H. Farr, P.C., we offer a service called DocuBank to ensure that that the documents you've completed will be there when you need them most, such as when you are hospitalized. DocuBank is an electronic storage and access service for healthcare directives. DocuBank stores all of your Advance Medical Directives, including your Living Will, Health Care Power of Attorney, HIPAA Release, Organ Donor Form, Funeral Arrangements, and All Other Advance Directives, so they are available whenever you need them. For some stress relief and to see me and some equally adorable Siamese cats (Saki and Alley) and a bunny (Commander Bun Bun), we encourage you to stop by The Law Firm of Evan H Farr and pet us all (except me, the fish, of course!). Looking forward to seeing you soon! P.S. Don't forget about your pet! Evan Farr just posted about Pet Trusts in Everything Elder Law. Check it out here! About Big Red: Big Red has lived at The Farr Law Firm for two years, and he belongs to Evan and Jeannie Farr. He resides on the table behind Jeannie's desk and his bowl can often be found on the hall table when you get off the elevator. He loves socializing with the African Dwarf Frogs (Ernie and Jannette) and greeting all of the clients that come to the firm. |
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