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Help With Long Term Care - Funeral Trusts

What is an Irrevocable Funeral Trust?
An IFT is a single pay Life Insurance Policy that is wrapped around by a trust.

Why do I need a Funeral Trust?
The basic answer is to protect the funds you have set aside to pay for your funeral. When planning for a major event such as a wedding, a new house, college, retirement... we all take a lot of time and plan ahead. We make sure that the decisions we are making are backed up by sound strategies that help protect our loved ones futures.

If there is a Nursing Home Event, and/or a Medicaid Event, you will lose most, if not all, of your cash value in your life insurance policy. You will not have funds to pay for your funeral! You thought you had protected your family from that burden, but now they will have to pay $6,000 to $14,000 for your funeral, out of their pockets. An IFT protects your final expense funds, relieves the burden from your family and guarantees peace of mind.

Should I go to my local funeral home to set this up?
NO! Most IFTs at your local funeral home lock you into that funeral home or have severe penalties to make a change. What happens if that funeral home goes out of business? What happens if that funeral home is bought out by another corporate conglomerate and is no longer that family run business that you have come to respect? What happens if you move... to be closer to relatives? You are now hundreds, if not thousands, of miles away from where you have set up your final resting plans. PORTABILITY! An IFT from Premier Solutions Group will ensure that your funds will be available at any funeral home, in any state, even the local funeral home you know and trust.

How much money can I put into an IFT to protect my assets from a nursing home or Medicaid event?
Let us stress that this is not a way to hide money from the government. This is a way to pre-fund your funeral and the funerals of some of your loved ones in a manner that is allowed under Medicaid guidelines. With that said, most states allow you to put up to $15,000 into the trust, contact us for state specific rules. However, as mentioned above, you can pre-fund the funerals of some of your loved ones and thus protect more of your hard earned funds. You are allowed to set up an IFT for you, your spouse, each of your immediate children and their spouses.

Lets look at an example: A man with Alzheimer's and Dementia that may have to go into a nursing home in the future has $140,000 in his name in available funds. His spouse, that has a Financial Power Of Attorney, sets up an IFT for her husband, herself, 5 of their children and 3 of their children's spouses. She sets up 10 IFTs, each for $12,500. This then protected $125,000 that would have gone to the nursing home or spun down under Medicaid guidelines. Understand that the reason the IFT is Medicaid friendly is because it is "Irrevocable" meaning that once the IFT is set up, no one can touch those funds until that individual passes away. These funds are only available for funeral costs. But ask anyone a simple question: Do you want your hard earned money to go to the nursing home/government, OR to your family?

Are these the same as other Irrevocable Trusts?
There are other types of Irrevocable Trusts, but these are the only ones that do not have a 5 year or 60 month Medicaid "Look Back". See our page on Irrevocable Estate Trusts for other options in pre-planning for a nursing home or Medicaid event.

Note: Each state has it's own rules and regulations. Make sure you contact us or your own legal advisor for state specific rules. These trusts are available in some form in every state except for Maine, New York and Vermont.

OHIO: Medicaid Guidelines for using Spend Down Funds for Burial Assets:
• You can purchase Burial Trusts for the Medicaid INDIVIDUAL & THEIR SPOUSES
• You can purchase Burial Trusts for each of the CHILDREN
• You can purchase Burial Trusts for each of the CHILDREN'S SPOUSES

5101:1-39-32.2 Medicaid: burial spaces.

(A) A burial space or agreement which represents the purchase of a burial space held for the burial of the individual, his or her spouse, or any other member of his or her immediate family is an excluded resource, regardless of value. Of items that serve the same purpose, exclude only one per person. For example, exclude a cemetery lot and a casket for the same person, but not a casket and an urn.

(B) Spaces held by deemors for the burial of an eligible individual, his/her spouse and/or any member of the eligible individual’s immediate family (including the deemor) are excludable. Space held by an alien sponsor or essential person for his/her own burial are excludable only if the sponsor/essential person is a member of the eligible individual’s immediate family.

(C) A burial space is a burial plot, gravesite, crypt, mausoleum, casket, urn, niche, or other repository customarily and traditionally used for the deceased’s bodily remains. The term also includes necessary and reasonable improvements or additions to such spaces, including but not limited to vaults, headstones, markers, or plaques, burial containers (e. g., for caskets) and arrangements for the opening and closing of the gravesite. For example, a contract for care and maintenance of the gravesite, sometimes referred to as an endowment or perpetual care, can be excluded as a burial space.

(D) an agreement which represents the purchase of a burial space is a contract with a burial provider for a burial space held for the eligible individual or a member of his/her immediate family. An individual’s immediate family includes his parents, including adoptive parents, minor or adult children, including adoptive and stepchildren, siblings, including adoptive and stepsiblings and the spouses of the immediate family members. In order for the burial space exclusion to apply to spouses of the immediate family members, the marriage must be in effect. For example, a burial space held for a sister-in-law is no longer excludable if she and the individual’s brother divorce.

(E) A burial space is held for an individual when someone currently has title to and/or possesses a burial space intended for the individual’s use (e. g., has title to a burial plot or owns a burial urn stored in the basement for his own use) or a contract with a funeral service company for specified burial spaces for the individual’s burial (i.e., an agreement which represents the individual’s current right to the use of the items at the amount shown).

(F) If the contract shows the purchase of a specified burial space at a specified price, determine whether such space is held for the individual or member of the individual’s immediate family. If the space is held for the individual, determine if the contract is irrevocable or revocable. If irrevocable, it is not a resource. If the contract is revocable, the burial space is an excludable resource. Until the purchase price is paid in full, a burial space is not “held for” an individual under an installment sales contract or similar device. If the individual does not currently own the space, he does not currently have the right to use the space, and the seller is not currently obligated to provide the space. If the contract calls for installment payments, determine whether the value of the burial space must be treated as an available resource.

R.C. 119.032 review dates: 4/19/2002 and 04/19/2007

Promulgated Under: 111.15

Statutory Authority: 5111.01, 5111.011

Rule Amplifies: 5111.011, 5111.01

Prior Effective Dates: 9/3/77, 2/1/79, 10/1/79, 1/3/80, 12/1/84 (emer.), 2/10/85, 9/1/94

Check with your state's Medicaid office and or your Attorny about state specific Spend Down Rules.

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