Burial Funds & Burial Spaces : What an Illinois Medicaid Applicant Can and Cannot Keep
In this Elder Law Minute, Wes Coulson explains the rules that many people overlook or may not know when it comes to having a prepaid funeral and burial contract be an exempt asset.
Greetings! I’m Wes Coulson from Dent Coulson Elder Law and this will be your Elder Law Minute. We’re happy to present these because we think we can help inform you as to the ways in which we can help you and the things that you need to think about relative to the elder care and estate planning journey. Hope you enjoy.
In today’s video which is part of the series on what a Medicaid applicant can and can’t keep in Illinois, we’re going to talk about burial funds and burial spaces. This is really an important topic because funeral and burial or cremations can be expensive, and they are exempt assets within the rules so this is something that presents a significant planning opportunity for protecting assets that would otherwise have to be spent down.
I’m going to start with a word of caution here, and that is that the rules here, tend to be very picky and particular, and so we always tell people, don’t go and do that yet. Let us guide you, let us make sure that you know the details of these rules, because this is either something that could be really good or something that could blow up in your face if it’s not done the right way.
The basic thing here is that a prepaid funeral and burial contract is essentially an exempt asset; something that you can keep, as long as certain rules are followed. First, there’s a limit on how much can be spent, but it’s a misleading limit. The rules say not more than seven thousand – two hundred and forty-eight dollars ($7,248.00), but they also make clear that, that’s for services and that doesn’t include burial spaces, and one of the things that they define as a burial space in addition to a grave site and a vault is a casket. So in most cases, people don’t spend more than seventy-two hundred and forty-eight dollars on services.
Another big requirement is that it be irrevocable, and that means once you’ve spent the money there’s no “I changed my mind, I’m going to get it back”, it has to be a done deal. The money has to be set aside. It can be set aside if you don’t want the funeral home to get the money right away, and take a chance on them going out of business. In a funeral trust fund, or to buy a life insurance policy that’s used to pay for the funeral that’s done again the right way. Sometimes, I’ve had people say, “well, what we’ll do, this is going to be great, we’ll buy a thirty-thousand-dollar funeral insurance policy, and then if we spend five-thousand on the funeral for cremation, the family will keep the other twenty-five thousand”. Sorry, that’s not the case, the rest of that money has to go by law to the Illinois Department of Health Care and Family Services so again, lots and lots of rules here but also a really good opportunity.
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.