Prepaid Funeral Plans and Medicaid- What You Need to Know!


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, burial, 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 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.

Medicaid regulations restrict an applicant from transferring, giving away or assigning assets in order to become eligible for benefits. Improperly transferred assets may result in ineligibility.Properly allocated funds, however, are excluded from resources when Medicaid eligibility is determined.

Prepaying for a funeral has other 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.


To find out more about prepaid funerals, read the Prepaid Funeral FAQs on The Fairfax Elder Law Firm of Evan H. Farr, CELA website. In addition, visit the website for more information 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.

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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