Blog Layout

Make Pre Paid Funerals Part of Your Estate Plan

Robin Burner Daleo • Nov 09, 2023

Question:

My father is in his eighties and although he is in good health, he would like to plan and pay for his funeral now. Does it make sense for him to do this?

Answer:

Yes, it does make sense to make plans for your father to make and pay for his own funeral arrangements. Many people pre-arrange and pre-fund their funerals as part of their estate plan. This arrangement can be done by either (1) going directly to the funeral home of your choice whereby the funeral is partially or fully pre-paid through the establishment of a funeral trust with the funeral home as trustee, or (2) the money can be deposited into a bank passbook account for the benefit of the funeral home.

Advantages of pre-planning and pre-funding one’s funeral expenses include peace of mind for the individual pre-arranging, the ability to make personal and specific selections for the funeral service, relieving the financial and emotional burden on loved ones, and for purposes of Supplemental Security Income/Medicaid can serve a spend down when necessary. A pre-need funeral trust allows recipients of SSI/Medicaid to set aside money to fully fund the funeral service of their choice before their funds are exhausted down to necessary eligibility levels or these government sponsored programs.

New York State mandates that prearrangements with New York funeral homes be revocable, except for SSI/Medicaid recipients. This means that all prearrangements (except when prepared for Medicaid spend down purposes) may be canceled at any time prior to death and the entire balance, including all accrued interest, must be refunded within ten (10) days of the request. New York State Law also mandates that pre-need burial trusts for applicants or recipients of SSI/Medicaid be irrevocable. This means that the prearrangement may not be canceled prior to death nor can funds be refunded if the actual funeral costs are less than then funded agreement. Thereby, an individual with a revocable agreement would have to convert it to an irrevocable agreement if they were to require Medicaid in the future

Regardless of whether the prearranged funeral agreement is revocable or irrevocable, your father or his children (after his death) can change the funeral home of choice at anytime. In New York, a funeral home is obligated to transfer the monies to the new funeral home within ten days of the receipt of a request to do so.

If he decides to pre-pay his funeral expenses, he should advise his family that he has done so and place the agreements receipt in a safe place so that there is no confusion about the arrangements in the future.

< Older Post

Newer Post >

May is National Elder Law Month

by Robin Burner Daleo • 03 May, 2024

May is National Elder Law Month, for that reason we have decided to switch from our normal format and answer a question that we are oftentimes asked in our practice, “What is an Elder Law Attorney and why do I need one?” Answer: Elder Law is a fairly new and unknown area of the law. As baby boomers and their parents’ age, they are living longer and oftentimes, living with chronic medical conditions. As the cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members, an experienced Elder Law attorney can help you and your family members establish an estate plan that maximizes protection of assets while ensuring that your loved one has the best care available to them should they face a health crisis. While it is always best to plan proactively, Elder Law attorneys are adept at crisis planning and oftentimes can provide a solution which can preserve assets or save taxes where others you have consulted have told you that no solution existed. Elder Law attorneys must be familiar with multiple areas of the law - contract law, estate planning, trusts and estate administration, Medicare, Medicaid, health care insurance regulations, Public Health Law, Mental Hygiene Law, the Internal Revenue Code & State and local tax issues. In each instance the issues that we deal with are fact sensitive and the clients must be willing to give us the information that we need to formulate the Elder Law plan. This in itself is oftentimes a struggle as the clientele that we deal with tends to value privacy and are oftentimes reluctant to divulge information regarding their assets and private family issues. The various disciplines that make up the Elder Law practice are in a constant state of flux. As a result, it requires the Elder Law attorney to spend a great deal of time reading current journals and cases and continuously taking legal education courses. In addition, many Elder Law attorneys meet in informal study groups to read, understand and strategize. As the facts change, there will likely be different solutions for each client. What works for one client may be totally inappropriate for another. For instance, in one day, we may see two different clients, both clients are 86 years old, own their own homes, and need long-term care. Client A has a daughter, age 55 and Client B has a niece age 55. Client A, on the eve of going into a nursing facility, is advised to transfer her home to her caretaker daughter, who lives with her and has lived with her for more than 2 years. The transfer does not make Client A ineligible for Medicaid. Client B cannot follow the same plan because her niece is not her child. There are no exceptions for transfers to caregiver nieces. Because we do not have an exempt transfer available to us for Client B I advise Client B to sell the home and advise her that even though no pre-planning has been done, we will likely be able to save more than sixty percent of her aunt’s assets by engaging in crisis planning. Remember - one size fits all – is not the rule. Your Elder Law plan is personal, fact sensitive and requires a careful review of all of the facts and circumstances. By: Robin Burner Daleo, Esq.