Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.
An Irrevocable Funeral Expense Trust is a trust your client would fund in order to pay for their funeral down the line. Here are just a few of the reasons your client may want to think about purchasing one:
- Peace of mind. With a purchase of an Irrevocable Funeral Expense Trust, your loved ones will not have the stressful task of planning a funeral for you as you have already made the necessary decisions. As this time will be a difficult time for your loved ones, there is one less stress they have to deal with and that is paying for and planning your funeral. By already purchasing the Trust and making your arrangements, your family can focus on being with loved ones.
- Tax benefit. There’s a tax benefit to an Irrevocable Funeral Expense Trust. The single premium paid for the life insurance inside of an Irrevocable Funeral Expense Trust grows on an income tax-free basis. Following the death of the insured, it is paid out on a tax-free basis.
- Protects funeral funds. The Irrevocable Funeral Expense Trust offers protection from creditors such as doctors, hospitals, nursing homes, and credit card companies. It will also eliminate the possibility that a funeral home can close unexpectedly, with its owners absconding with entrusted funds, similarly to how it happened in Detroit.
- Accelerated eligibility for benefits. Trusts are not considered an asset in determining eligibility for Medicaid, VA, and SSI. If you purchase an irrevocable funeral expense trust, this can help spend-down your assets in order to be under the income regulations for Medicaid.
- Simple process to complete. An Irrevocable Funeral Expense Trust can be established in 24 hours. The application process is simple and does not require any medical underwriting, and can be completed in as little as 10 minutes.