MEDICAID TITLE 19, FUNERAL TRUSTS & CONTRACTS
Anyone applying for Medicaid is entitled to set aside funds for the purpose of paying their funeral/burial expenses as part of the spend-down process.
Placing funds in pre-funded funeral contracts is permissible by law.Current Title 19 regulations allow an individual to enter into and pre-fund one or more of the following types of contracts with a CFDA-member funeral home (all of these funds must be used to pay for funeral expenses):
1. IRREVOCABLE TRUST
An Irrevocable Trust can be pre-funded up to $10,000, according to Public Act 19-57 that was established in 2019. In addition, Department of Social Services has confirmed that existing $8,000 contracts may be increased to the new $10,000 limit without impacting the recipients Medicaid eligibility. Selections listed under the Irrevocable Trust include: basic service charges, funeral services, preparation of remains, vehicles, etc.
Note that the $10,000 financial cap may not be sufficient to cover all of the costs to provide for the funeral of your choice. Once prepaid, an Irrevocable Contract cannot be cancelled or cashed in, but may be transferred to another licensed funeral home.
2. BURIAL PLOT ALLOWANCES - REVOCABLE CONTRACT
A Revocable Burial Plot Allowance contract can be pre-funded in an amount for specific burial and cemetery items and services that meet your needs, without any dollar limitation, according to State of Connecticut General Statutes 17b-91(b) that was established in 2004.
This kind of burial plot allowance contract can only include the purchase of the following burial plot items:
- Casket or Urn
- Outer Burial Container or Vault
- Cemetery Expenses (gravesite, opening and closing charges)
- Cemetery Monument, Marker or Mausoleum and Engraving
- The family may choose and pre-fund any or all of these burial plot items.
A Revocable Contract can be cancelled or transferred at any time that the person is on Title 19. But, according to law, if the Revocable Contract is cancelled, then the funds must be returned to the State of Connecticut.
3. LIFE INSURANCE
Current regulations entitle you to own one or more personal life insurance policies with a combined face value (death benefit) of not more than $1,500.
If the total is more than $1,500, the cash surrender value of the policies will be counted as an asset when applying for Medicaid. If you do not have any insurance policies, ask your local funeral director for information on preparing up to a $1,500 face value policy.
- Irrevocable Trust – pre-funded up to $10,000
- Revocable Burial Plot Allowance – pre-funded in an unlimited amount for specific burial and cemetery items and services
- Life Insurance Policy with up to $1,500 face value