Critter Corner: Should I Prepay for My Funeral?

Dear Angel,
My family recently sat down to discuss the difficult topic of death and dying. Thinking about it brought to mind our funerals.  During a time of grief, I would hate to put my family through funeral planning and have them incur thousands of dollars in costs for a plot, burial, a service, and more. So, in addition to the planning we will be doing with the Farr Law Firm, do you recommend that we look into prepaid funerals as well? If so, will it affect Medicaid planning?
Ina Dvance
Dear Ina,
Prepaying for a funeral has some benefits, including locking in prices, relieving the burden of family members during a time of emotional stress, and ensuring that your personal wishes are carried out according to your wishes.
How it Works
A prepaid funeral contract is a legal agreement that allows a person to pay now for funeral services that will be needed sometime in the future. This contract may include the funeral or memorial service, burial or cremation, and other related services. A prepaid funeral contract may be revocable or irrevocable. Irrevocable means the contract cannot be canceled. Only an irrevocable funeral contract is an exempt asset for Medicaid purposes.
Medicaid and Prepaid Funerals

Medicaid 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 allows you to put money aside, in a separate account, to pay for your funeral and burial expenses. Qualified funding vehicles, such as funeral insurance policies and trust accounts are allowed, provided they are irrevocable and non-refundable, and cannot ever be used for purposes other than funeral expenses. 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.

You can read more about this topic in our Prepaid Funeral FAQs.
Hope this helps!
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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.

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