Using a Pre-Paid Funeral Contract to Spend Down Assets for Medi-Cal
No one wants to think about his or her death. However, a little preparation in the form of a prepaid funeral contract can be useful. In addition to helping your family after your passing, a prepaid funeral contract can be a good way to spend down assets in order to qualify for Medi-Cal.
A prepaid contract allows you to purchase funeral goods and services before you die. The contract can be entered into with a funeral home or cemetery. Prepaid funeral contracts can include payments for embalming and restoration; a room for the funeral service; a casket, vault or grave liner; cremation; transportation; permits; a headstone; a death certificate; and an obituary, among other things.
One benefit of a prepaid funeral contract is you are paying now for service that may increase in price-possibly saving your family money. You are also saving your family from having to make arrangements after you die, which can be difficult and time-consuming.
Another benefit is it can be a way to spend down your assets. Medi-Cal applicants must spend down their available assets until they reach the qualifying level ($2,000 if you are single or your spouse is already in a nursing home). By purchasing a prepaid funeral contract, you can turn available assets into an exempt asset that will not affect your eligibility.
For information from the Federal Trade Commission on shopping for funeral services, see: https://www.consumer.ftc.gov/article/pdf-0056-funerals.pdf.
Ms. MacDonald’s practice is limited to Estate Planning, Probate & Trust Administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite A-209, Valencia, California. She can be reached at 661-294-6464.
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