Preneed funeral contact and Medicaid planning

On Behalf of | Jul 28, 2021 | Estate planning

While it is inevitable, it is difficult to think about one’s death. The thought is uncomfortable, especially when an individual is young and in good health. Nonetheless, it is important to consider what one’s wishes are after their death beyond what they want contained in their will. Funerals can be costly, and it is often difficult for loved ones to deal with the details of a funeral while coping with a loss. Thus, it may be beneficial to take steps to preplan for a funeral.

Preneed funeral contracts

Creating a preneed funeral contract holds many benefits. To begin, it takes the burden off of mourning loved ones. Additionally, it does not take money from the estate, allowing heirs to benefit from it. Furthermore, it avoids having loved ones bear the cost of the funeral and burial. Finally, it allows an individual to choose each and every detail of their funeral and burial, allowing them to consider the costs and weigh them against their wishes.

Interaction with Medicaid Planning

Prepaying for a funeral cause some to fear that it will interfere with Medicaid. However, having a preneed funeral contract will not be counted against an individual when determining eligibility for Medicaid for the individual or their spouse. This means that the Medicaid planning done to address long-term care costs will not be interfered with so long as the preneed funeral contract is irrevocable. If it is not, it may not qualify for an exclusion as an asset.

Funerals are not easy to plan or prepare for but taking this step could help loved ones and ensure your wishes are met. A preneed funeral contract should be considered with Medicaid planning and other estate planning, as this process benefits and interacts with them. Therefore, it is important to gain a better understanding of this process and how best to proceed.