Medicaid Safe Trust Plans
Providing for a Funeral
Few people have the resources to pay for a funeral on short notice.
If you rely on your friends and family to pay for your final expenses, you may be leaving behind more than heartache. Without advanced planning and funding, your loved ones may need to reach into their savings accounts, use credit cards, take out a loan, or even sell personal assets in order to pay for your final expenses. Money set aside in savings accounts may be subject to early withdrawal penalties, get tied up in probate or be depleted by long-term care expenses or nursing home fees.
A wise choice to protect your loved ones is to set aside funds for your final expenses with a life insurance policy/certificate (“policy”).
Final expenses may also include:
- Monuments
- Medical Bills
- Credit card bills
- Cemetery costs
- Outstanding loans
How it Works
Taking these simple steps will create a safe plan to cover these expenses.
First a life insurance policy is purchased to cover the anticipated costs of your funeral. The policy is then assigned to an irrevocable funeral trust. This assignment offers two advantages:
1. At the time of death, policy proceeds avoid probate and are available immediately to pay for final expenses.
2. The policy is not considered an asset if you are determining Medicaid eligibility.3
This combination of life insurance and a funeral trust provides a secure plan to cover your final expenses.
Security and Protection When You Need It Most
The funds in the policy will be first used to pay your funeral expenses with any excess returned to your estate or beneficiary depending on the plan you choose.
By irrevocably assigning your policy and permanently transferring all ownership rights to a Forethought® Trust PlanSM, you’ll receive the following benefits:
- May give you the ability to exclude your policy as an asset in order to qualify for Medicaid and Supplemental Security Income (SSI).
- Policy proceeds are paid to the Trust, which then pays funeral costs.
- Funds set aside in the Trust to be used for funeral expenses are protected from creditors such as nursing homes, hospitals, lawyers, etc.
- Proceeds used for funeral expenses will avoid probate costs and delays.
- The policy benefit will increase with simple growth income tax-free