How to Use Funeral Expense Trusts in Long-Term Care Planning

Funeral Expense Trusts (FETs) are a staple in any long-term care plan, whether your client is planning ahead or already in a care facility. As such, it’s crucial for you to understand these trusts, how they work in conjunction with crisis planning, and the benefits they offer to both you and your clients in the long-term care planning process. Read More: A Financial Advisor’s Role in Estate Planning Benefits of Funeral Expense Trusts A Funeral Expense Trust is a small guaranteed-issue life insurance policy that is irrevocably assigned to a funeral trust controlled by the insurance policy. Upon the death of the insured, the funds are immediately available to pay for their funeral and burial costs. Clients who purchase a Funeral Expense Trust can take advantage of the following benefits: • Setting aside funds so loved ones don’t have to cover end-of-life costs • Flexibility in choosing a funeral home and the goods and services they receive • Spending down assets to protect them from Medicaid Read More: Prepaid Funeral Plan vs. Funeral Expense Trust In addition to preserving your client’s assets for end-of-life expenses, this product is a simple yet effective way to increase your earnings. Agents who sell Funeral Expense Trusts can take advantage of a quick sale and competitive commission opportunity. FETs and Crisis Planning Although Funeral Expense Trusts are a great add-on for pre-planning scenarios, the product is particularly beneficial in crisis planning. FETs are exempt from Medicaid as long as their face value is below a state-specific limit—$15,000 in most states. Plus, some states allow applicants to purchase trusts for their immediate family members. Thus, FETs serve as a simple add-on to any crisis planning spend-down plan. Letter of Goods and Services In order to be exempt from Medicaid, some states require a Letter of Goods and Services accompany the Funeral Expense Trust. This letter outlines the specific funeral expenses to be covered, including the casket, burial plot, funeral service, and other parts. If necessary, our team at The Krause Agency is happy to help obtain this letter on your client’s behalf. Are you interested in learning more about Funeral Expense Trusts and how to use them in your long-term care planning cases? Schedule a call with our in-house advisors to explore how this product can help you preserve your client’s assets and boost your revenue in the process.
Katie Camann
Katie Camann February 18, 2022

As Content Marketing Specialist, Katie drafts and edits content across multiple platforms, including blogs, Industry News, emails, videos, website pages, and more. She conducts research and gathers up-to-date information to keep our clients well-informed.


Funeral Expense Trusts (FETs) are a staple in any long-term care plan, whether your client is planning ahead or already in a care facility. As such, it’s crucial for you to understand these trusts, how they work in conjunction with crisis planning, and the benefits they offer to both you and your clients in the long-term care planning process.

Read More: A Financial Advisor’s Role in Estate Planning

Benefits of Funeral Expense Trusts

A Funeral Expense Trust is a small guaranteed-issue life insurance policy that is irrevocably assigned to a funeral trust controlled by the insurance policy. Upon the death of the insured, the funds are immediately available to pay for their funeral and burial costs.

Clients who purchase a Funeral Expense Trust can take advantage of the following benefits:

  • Setting aside funds so loved ones don’t have to cover end-of-life costs
  • Flexibility in choosing a funeral home and the goods and services they receive
  • Spending down assets to protect them from Medicaid

Read More: Prepaid Funeral Plan vs. Funeral Expense Trust

In addition to preserving your client’s assets for end-of-life expenses, this product is a simple yet effective way to increase your earnings. Agents who sell Funeral Expense Trusts can take advantage of a quick sale and competitive commission opportunity.

FETs and Crisis Planning

Although Funeral Expense Trusts are a great add-on for pre-planning scenarios, the product is particularly beneficial in crisis planning. FETs are exempt from Medicaid as long as their face value is below a state-specific limit—$15,000 in most states. Plus, some states allow applicants to purchase trusts for their immediate family members. Thus, FETs serve as a simple add-on to any crisis planning spend-down plan.

Letter of Goods and Services

In order to be exempt from Medicaid, some states require a Letter of Goods and Services accompany the Funeral Expense Trust. This letter outlines the specific funeral expenses to be covered, including the casket, burial plot, funeral service, and other parts. If necessary, our team at The Krause Agency is happy to help obtain this letter on your client’s behalf.

Are you interested in learning more about Funeral Expense Trusts and how to use them in your long-term care planning cases? Schedule a call with our in-house advisors to explore how this product can help you preserve your client’s assets and boost your revenue in the process.