Death is a difficult topic for many to discuss and plan. It is beneficial to prepare for your death through prepaid funeral arrangements. After an individual’s death, the property is often inaccessible until it is opened. Therefore, the bereaved family must pay the funeral expenses in advance until the property is opened. Prepaid funerals are one way to ensure that funeral and burial costs are covered. Prepaid funeral contracts are a good way to save money in order to qualify for Medicaid, in addition to helping your family after death.

Prepaid or pre-paid funeral contracts allow you to purchase funeral supplies and services before you die. Contracts can be concluded with funeral companies and graveyards. Prepaid funeral contracts include payments for embalming and restoration, funeral rooms, caskets, vaults or grave liners, cremation, transportation, permits, tombstones, death certificates, death certificates and more. One of the benefits of prepaid funeral contracts is that you will now be paying for services that may increase in price, saving your family money. Also, you don’t have to go through the tedious and time-consuming process after your family dies.

The Pennsylvania Department of Social Welfare (DHS) publishes an updated graph of burial costs each year. This chart shows the maximum amount that can be used to fund an irrevocable burial reserve or prepaid funeral under the Medicaid Regulations of Pennsylvania. The advantage of prepaid funeral expenses is that prepaid or burial reserves are not counted as a resource when qualifying for Medicaid. Your account must be irrevocable in order to be a Medicaid exempt asset. That is, you cannot withdraw funds before the death of an individual. In addition, the amount of reserves or the amount used for funeral prepayments cannot exceed the burial limit set in 55 Pa. Code § 178.5, Pennsylvania.

The burial reserve limit changes annually based on the average burial cost for each county. It is important to note that the maximum amount is based on burial and cremation tends to be less. Each county conducts a survey of local funeral homes in the county to determine the average cost.

In Montgomery County, the burial reserve cap is $ 18,847, with a 25% additional allowance for special burial-related costs, for a total burial reserve cap of $ 23,558.75 in 2021. The total burial reserve for 2021 is capped at $ 30,968.13, with an additional% allowed for special burial-related costs.

Prepaid funeral expenses and setting burial reserves are great tools you can use when applying for Medicaid. However, you should consult an elder lawyer before funding the burial reserve or making a prepayment for the funeral. If your account is overfunded or improperly set up, Medicaid benefits may be denied. In addition, surplus funds remaining from irrevocable burial reserves after burial costs have been paid may become part of the estate and be subject to a DHS claim for heritage recovery.

The legal advice given in this column is by nature general. Please consult a lawyer for your specific situation.

Rebecca A. Hobbs, Esquire, is licensed to operate in Pennsylvania and is accredited by the National Elders Law Foundation as an elder lawyer with the approval of the Pennsylvania Supreme Court. She is the principal of the law firms of O’Donnell, Weiss & Matthew, PC, 41 High Street, Pottstown, 347 Bridge Street, Phoenixville, 610-323-2800. owmlaw.comYou can access .Ms. Hobbs. rhobbs@owmlaw.com

Legal Ease: Prepaid Funeral Expenses | Lifestyle

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