A little known “spend down” technique for Medi-Cal qualification purposes is the FUNERAL EXPENSE TRUST, also known as the FINAL EXPENSE TRUST. Medi-Cal allows for assets in any amount to be transferred from the Medi-Cal applicant to an irrevocable trust, to pay for the funeral expenses of the Medi-Cal recipient. This transfer does not create any periods of ineligibility for Medi-Cal qualification.
In our office, The Law Offices of Michael J. Young, www.WalnutCreekElderLaw.com, we routinely ask our clients at the initial meeting about their thoughts regarding funeral arrangements. We talk about burial vs. cremation, a traditional funeral vs. no funeral, or something in between. We also talk about potential costs for final expenses. Many of our clients will transfer funds to the irrevocable trust to create immediate eligibility for Medi-Cal, without creating a period of ineligibility.
Other clients, and their families, just like the peace of mind, aside from Medi-Cal issues, in knowing that cash is available in the trust for funeral expenses. These funds are protected from creditors, such as nursing homes, hospitals, etc., because the funds are in an irrevocable trust. There are no probate issues concerning the funds, and the fund is income tax free. The family can take the trust to any funeral home or cremation service, etc., in any state, and use the funds for their loved one. In addition, with the trust fund for funeral expenses in hand, it is easier for the family to shop for funeral services when the time comes. Of course, additional services can be purchased. Funds not used from the trust fund are available to the estate of the decedent and to Medi-Cal.
Your elder law attorney can provide more information to you about the final expense trust. Written by elder law attorney Michael J. Young, 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. www.WalnutCreekElderLaw.com mike@WalnutCreekElderLaw.com. 925-256-0298