RCFS

"Improving Lives — Protecting Futures"
rcfs logo
Menu

Funeral and Burial Plans

Planning ahead for funeral and burial expenses can help protect funds for final arrangements while supporting eligibility for certain public benefits. Several planning options may be available depending on a person’s needs and circumstances.
irrevocable burial trust

About Funeral and Burial Plans

Proper funeral and burial planning is extremely important for gaining access to valuable government benefits such as SSI, Medicaid, Medicaid Long Term Care, Medicaid Home and Community Based Waivers, Medicare PACE Programs, and Medicare Savings Programs.
Traditional planning often involves the use of insurance products that leverage a future death benefit to pay for these services at the time of death. These products have accessible cash value, and most government benefit programs have very low cash value limits that often make these products countable resources which disqualify individuals for benefits.
Fortunately, there are options to resolve this problem that allow for more resources to be available at time of death:

Irrevocable Funeral Trusts (IFT)

An Irrevocable Funeral Trust (IFT) is a prepaid, non cancelable trust that sets aside money exclusively for funeral or burial expenses and is exempt from Medicaid asset calculations.

  • It is a legal agreement that permanently sets aside funds for funeral, burial, or cremation expenses. Once created, it cannot be changed or refunded.
  • Funds are held in a state regulated trust and can only be used for approved final expense costs.
  • Often funded through a life insurance policy or annuity placed into the trust.
  • IFTs are one of the few Medicaid approved spend down tools.
  • Funds placed in an IFT are not counted toward Medicaid’s asset limit.
  • Unlike other irrevocable trusts, IFTs do not trigger the five year look back period.
  • IFTs ensure funds are available and prevent financial burden on families.
  • Once funded, the money is permanently protected from creditors and cannot be reclaimed.
  • Typical covered expenses include:
  • Funeral home services
  • Casket or urn
  • Burial plot, vault, or cremation
  • Transportation
  • Obituary and memorial items
  • Ceremony costs
  • Items often not covered:
  • Flowers
  • Family travel
  • Non funeral debts

State Rules and Limits

An Irrevocable Funeral Trust (IFT) is a prepaid, non cancelable trust that sets aside money exclusively for funeral or burial expenses and is exempt from Medicaid asset calculations.

Pre-paid Funeral Plans

Prepaid funeral plans let you arrange and pay for your funeral at today’s prices, locking in costs and reducing future financial and emotional burden for your family.

  • A prepaid funeral plan is a contract with a funeral director that allows you to choose and pay for your funeral in advance.
  • Funds are held in either an approved trust or by an insurance company and released only after the funeral is completed. Funds should never be held in a Funeral Home operating account.
  • Costs are fixed at today’s rates, protecting against inflation.
  • Your wishes are documented, removing guesswork and stress.
  • Fully paid plans may be exempt from asset tests.
  • Limited flexibility if you move outside the provider’s service area.
  • Changing your plan later can be difficult.
  • Specific items chosen (e.g., floral arrangements) may not be available in the future.

Burial Spaces

A burial space may be a conventional grave site, crypt, burial drawer, mausoleum, urn, or any other repository for the remains of a deceased person. A burial space includes necessary and reasonable improvements or additions to the burial space, including but not limited to:
  • Vault
  • Headstone
  • Marker
  • Plaque
  • Burial container (casket)
  • Arrangement for opening and closing of the gravesite

Irrevocable Assignment

of a Life Insurance Policy

An irrevocable assignment of a life insurance policy is a legal agreement that transfers ownership of a life insurance policy from the original owner (the assignor) to another individual or entity (the assignee). This type of assignment is permanent and cannot be altered or revoked without the consent of the assignee. It is often used for various financial and estate planning purposes. Once an irrevocable assignment is made, the original owner loses all rights to the policy, including the ability to change beneficiaries or access cash values.

Funeral and Burial Assistance

RCFS can assist in setting up plans if none are currently in place and we can assist in converting plans that are causing ineligibility for government benefits. Please visit our Resources page for additional information regarding funeral and burial planning.
info@rcfstrusts.org
(724) 385-8492
services
Accessibility by WAH
Scroll to Top