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Managing The Stress ~ Making The Decisions ~ Discovering The Meaning |
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Caregiving |
Solutions To Your Caregiving Situations Throughout Your Caregiving Years |
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Financing the care Pre-Planning Funeral Part of Estate Planning Process “Who calls an accountant on April 15th at 4 p.m. to discuss their tax return?” muses Mark Giancola, Giancola Funeral and Cremation, with offices in Chicago and the Chicagoland suburbs. “Why wait until the last minute to discuss and plan your funeral service?” The majority of families who plan in advance, Mark says, are those families who have recently placed a family member in a nursing home. Expenses related to the funeral and its services are Medicaid-exempt assets, meaning a person can qualify for Medicaid benefits while setting aside money for a funeral and burial. When pre-planning the funeral, all expenses related to the service can be placed in trust, earning interest. And, expenses relating to the funeral include any travel expenses expected to be incurred by out-of-town family and friends (travel, hotel, rental cars, etc.). Check with your state’s Medicaid office about limits, if any, Medicaid places on money spent on a funeral and services. Families determine how much they would like to spend; the funeral director then places that amount in an irrevocable trust. The funeral director must deposit 95% of that money in the trust; he or she can use 5% of the money for operating expenses. The cemetery, on the other hand, need only deposit 50% of the money in a trust—which is why it’s critical to choose a good funeral director and a reputable cemetery. Planning ahead is not only a good financial planning tool, but you buy the time needed to find the funeral director you like, who will provide the service that you and your care recipient request. Mark offers these suggestions when choosing a good funeral director:
And, a reputable funeral director will have a reputable trust device (such as through the state funeral home association), providing regular statements so you are assured the money is safe and accumulating interest. Planning the funeral service with your care recipient now ensures your care recipient has the service he or she wants and can afford. Quick Tip: Spousal Protection If you place your spouse in a nursing home, you may worry that you’ll have to deplete all your assets to pay for your spouse’s care. Medicaid does protect the spouse who remains at home. The spousal impoverishment rules allow you to retain up to $92,760 (in 2004, levels change annually) in assets, as well as a monthly allowance of up to $2,319, while qualifying your spouse to receive Medicaid benefits in the nursing home. In addition, the at-home spouse keeps the residence and any other exempt assets, such as household goods, personal effects and, in some states, IRA’s. Other allowances can be made for an at-home spouse, which differ from state-to-state. An eldercare attorney and financial planner can work with you to ensure you and your spouse are both cared for. In addition, your local Area Agency can provide more details; call the ElderCare Locator at 1-800-677-1116 for a referral to your local agency. Estate planning protects present and future assets How you relate to money can help you create your financial wealth Estate jewelry option for care bills |
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