When applying for Medicaid benefits for a loved one, an important planning strategy to employ is the establishment of a pre-paid funeral arrangement in the form of an Irrevocable Trust. Once established, it becomes a “non-countable” asset when Medicaid looks back over the prior sixty months in order to determine someone’s eligibility and legitimate expenditures. If this strategy is not utilized and all funds of the applicant are taken by Medicaid before funeral arrangements have been paid for, the family will be left to assume the burden of the funeral costs from their own resources at the time of need.
Star of David utilizes PREPLAN, the trust administered by the NY State Funeral Directors Association. This trust is acknowledged as the industry standard, placing the funds in an interest bearing, FDIC insured account. You may visit Preplan.
It is important to note that funds earmarked for funeral services placed in an Irrevocable Trust cannot be returned, unlike funds placed in a Revocable Trust. Only Medicaid applicants or recipients are eligible for an Irrevocable Trust. All other pre-arrangements must be funded in a Revocable Trust, where the purchaser may rescind the contract anytime and receive a full refund plus accumulated interest.