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Virginia- Can I pay my immediate family member's funeral expenses or set aside money for this in a funeral trust and be exempt?

Clarksville, VA |

Can I use my funds to fund family members funeral expenses if this move is irrevocable? Is this move legal as part of the spend down prior to applying for Medicaid?

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Medicaid Regulations permit the Medicaid Applicant to purchase of prepaid funeral plans for both the applicant and his spouse (and his or her children, if desired) if set up properly using either an irrevocable life insurance policy, a special type of irrevocable trust, or both. Most funeral homes will tell you that they have an appropriate trust or insurance "system" in place, but in actuality many of them do not use an appropriate system. Only an experienced Elder Law Attorney can tell you whether the proposed prepaid funeral arrangements will satisfy the very detailed Virginia Medicaid requirements.

Additionally, purchasing prepaid funeral arrangements is just one of dozens of different Medicaid Asset Protection strategies that someone applying for Medicaid can use to legally and ethically shelter assets. With proper planning, families can obtain Medicaid assistance without having to deplete their life savings. I suggest you contact an experience Elder Law Attorney in Virginia as soon as possible, before you make any prepaid funeral arrangements or take any other steps towards filing for Medicaid. Medicaid is the most complex area of law in existence, and one mistake can have tragic consequences for you or your loved one. Our firm serves clients througout Virginia and would be happy to assist you.

Evan H. Farr can be reached at 703-691-1888 or at http://www.farrlawfirm.com. Evan is Certified as an Elder Law Attorney by the National Elder Law Foundation, which is approved by the American Bar Association, but Virginia has no procedure for approving certifying organizations. NOTICE - Unless expressly stated otherwise, this communication: (1) is not legal advice absent an existing attorney-client relationship between us; (2) does not create an attorney-client relationship; (3) does not constitute an offer, acceptance, or contract amendment; (4) may contain confidential or legally privileged information protected by the attorney-client relationship and/or work product privilege; (5) is only for the use of the individual to whom it is intended by the sender to be sent, and if you are not such recipient, disclosure, copying, distribution or reliance upon this communication is prohibited; and (6) is not intended, and cannot be used, to avoid tax-related penalties pursuant to treasury department circular 230.

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Attorney Farr is giving you good advice. You should heed it. Irrevocable prepaid funeral plans are one of the few methods of spending down assets that benefits the rest of the family. It helps you or your spouse qualify for Medicaid and the kids don't have to come up with the money out of their own pockets to pay for your funeral when you pass away.

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Qualified prepaid funerals are an exempt from penalty Medicaid planning technique. However, if the proper arrangement and paper work aren't used a prepaid funeral arrangement either will be a countable resource or trigger gift penalties. Therefore, it's important to consult an elder law attorney before doing Medicaid planning.

Lawrence Friedman, Bridgewater, NJ. Certified as an Elder Law Attorney by the ABA approved National Elder Law Foundation, former Chair NJ State Bar Association Elder and Disabilities Law Section, Member Board of Consultors of NJSBA Real Property, Trusts & Estates Law Section, Vice Chair Special Needs Law Section of National Academy of Elder Law Attorneys, and Master of Laws (LL.M.) in Taxation from N.Y.U. School of Law. Visit SpecialNeedsNJ.com for articles and Q&A on elder law, special needs, wills, trusts, estates, and tax. Visit SpecialNeedsNJ.com/blog and subscribe for free timely updates to be delivered to your inbox. Information on both Avvo and SpecialNeedsNJ.com does not constitute legal advice, as it is general in nature and may not apply to your situation or be subject to important changes. No attorney client relationship exists unless set forth in written engagement terms.

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