Medicaid planning with the use of funeral arrangements just became much more difficult in Indiana. These changes are twofold.
The first change has to do with the making of funeral arrangements for family members. The old law allowed a Medicaid applicant to purchase irrevocable funeral trusts for a spouse, children, stepchildren and spouse of children or stepchildren.
The new law only allows the applicant to purchase irrevocable funeral trusts for the applicant and spouse. The applicant may still buy gravesites and markers for family members. This change is being challenged because it may violate federal law. We are advising our clients not to purchase funeral arrangements for family members.
The second change requires the State of Indiana or the estate of the applicant to be the beneficiary for any excess funds for a life insurance policy irrevocably assigned to a funeral home. If the life insurance policy has been transferred to an irrevocable funeral trust or an irrevocable prepaid funeral agreement, and has one or more policies with the face value that exceeds $10,000 (excepting term policies), then it can be exempted if it designates the State of Indiana or the applicant’s estate to receive any remaining amounts after services are paid for
Examples of the second change!
Please contact us with any questions.
Very truly yours,
Keith P. Huffman