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Pre-Funding Options for Medical Assistance
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  Six Common Funeral Pre-Funding Options

                                                       
Allowable Medical Assistance Exemption                                
     Funding 
    Option
       Description

      Services          

   Merchandise      Cash Advances 
 1 Irrevocable
Insurance
Policy or Annuity

• Irrevocable Trust Assignment
• Funeral Home Itemization (1)       
 • Beneficiary: Any Funeral Home as Its Interests Appears
• Contingent Beneficiary: Estate of Insured

Actual cost of all funeral service expenses (2) and all accumulated interest
(no cap)

• Actual cost of  funeral merchandise (3)
• Burial space items
• Non burial space (6)
merchandise
All accumulated interest 

• Actual cost of funeral cash advanced items (4)
• Burial space items
• Non-burial space cash
advance items
All accumulated interest

 2

Irrevocable
Life
Insurance
Assignment

• Irrevocable 
 Assignment
Funeral Home Itemization (1)
• Beneficiary: Any Funeral Home as its Interests Appears
• Contingent Beneficiary: Estate of Insured

Actual cost of all funeral service expenses (2) and all accumulated interest
(no cap)

• Actual cost of funeral merchandise (3)
• Burial space items (5)
• Non-burial space (6)merchandise
All accumulated interest

• Actual cost of funeral cash advanced items (4)
• Burial space items
• Non-burial space cash advanced items
All accumulated interest

 3

Irrevocable Bank
Deposit

• Irrevocable Trust Assignment
• Funeral Home Itemization
• Funeral Home Named as Trustee

• Actual cost of funeral service expenses ($2,000 cap (7)
• Accumulated interest on funds under the cap only
• Actual cost of funeral merchandise that are considered burial space items only
• Accumulated interest on burial space items funds only

• Actual cost of funeral cash advance items that are considered burial space items only
• Accumulated interest on burial space items funds only

 4 Revocable
Bank
Deposit
• Revocable Trust Assignment
Funeral Home Itemization
• Funeral Home Named as Trustee

• Actual cost of funeral service expenses ($1,500 cap )
• Accumulated interest on funds under the cap only

• Actual cost of funeral merchandise that are considered burial space items only
• Accumulated interest on burial space items funds only
• Actual cost of funeral cash advance items that are considered burial space items only
• Accumulated interest on burial space items funds only
 5

Informal
"Burial
Fund"
Bank
Deposit

• Bank C.D.
• Savings Account
• P.O.D. Account
• No Funeral Home Involvement

 

   • $1,500 cap on total exemption.
• Accumulated interest is exempted only until cap is reached.
• No accumulated interest above the total cap is exempted.
 6

 "Final Expense" Insurance or Annuity
Policy

•Private Insurance or Annuity Policy Owned by an Individual
•No Funeral Home Involvement

 

  • $1,500 cap on total exemption.
• Accumulated interest is exempted only until cap is reached.
• No accumulated interest above the total cap is exempted.

1)
Funeral Home Itemization is a State and Federally required form that is a detailed

listing of services, merchandise, and cash advanced items made by the funeral
establishment. Commonly called a Statement of Funeral Goods and Services Selected,
Purchase Record, or Contract.


2)
Funeral Service Expenses are the normal and customary services that funeral
directors and funeral establishments provide. These may include staff charges such as
embalming, arranging and conducting the funeral, transportation and facilities charges,
and general overhead.


3)
Funeral Merchandise Expenses are the goods that funeral establishments sell
such as caskets, vaults, register books, thank-you cards, memorial folders, monuments
and markers, urns, and cremation containers.


4) Cash Advanced Items
are items not sold by the funeral home, but are normally
placed on the Statement of Funeral Goods and Services Selected as an accommodation
to the family. Examples may include death certificates, obituary notices, music and
clergy honoraria, grave opening and closing fees, and traffic escort.


5) Burial Space Items
can best be described as items necessary for, or directly
involved with, the final resting place of the deceased. These may include Funeral
Merchandise or Cash Advanced Items. Examples include casket, vault, grave lot, grave
opening and closing fee, mausoleum space, cemetery monument or marker, cremation
fee, urn, and niche.


6) Non-Burial Space Items
are Cash Advanced Items or Funeral Service Expenses
that are not necessary for, or directly involved with, the final resting place of the
deceased. Examples include register books, memorial folders, or register books
(which are Funeral Merchandise), death certificates, obituary notices, traffic escort,
funeral lunch costs, and music and clergy honoraria (which are Cash Advanced Items).

7) $1,500 cap on total value of pre-funded funeral fund applies to those seeking
retroactive Medical Assistance.


Other important definitions/rules:

Spend-Down Option: Current Medical Assistance guidelines allow a pre-funded
funeral tobe purchased by the institutionalized spouse for the community spouse
under the allowable exemptions as detailed above. Additionally, Burial Space Items
only may be purchased for other family members of the institutionalized individual.

Pre-Funding Timing: For married couples, pre-funding must be done prior to the
month of application for Medical Assistance.

Asset Transfers: Asset transfer rules may be utilized in certain special cases for
funeral pre-funding or asset preservation.

Programs other than county Medical Assistance may have guidelines that differ
from these. Program regulations also vary from state to state regulations. As with
all decisions that may affect your Medical Assistance eligibility, we strongly recommend
you consult a specialist in this field for more specific advice.

Why should I pre-fund my funeral or cremation service?

Here are a few issues to consider if you are considering making pre-arrangements.
A properly structured pre-funded funeral program:
• May be exempt from Medical Assistance asset limitations.
• Offers you peace of mind, knowing that your funeral expenses are handled without
   burdening your loved ones.
• Makes your wishes known to your loved ones.
• Helps ensure that your funeral will reflect your individual preferences and lifestyle.


For pdf of 6 Pre-Funding Options for Medical Assistance click here.

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