Logistics of POA setting up a funeral trust?

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newbiewife Asked January 2020

Logistics of POA setting up a funeral trust?

My husband is POA for his brother who's in a nursing home. Brother is not declared incompetent, but can't handle his finances so my husband has been doing it for him for several years (selling his house to pay for the nursing home, spending down his other assets etc.). They will probably have to do Medicaid application in the next 3-4 months, and my husband would like to set up a funeral trust for his brother before the funds run out and before the Medicaid application; brother appears to be agreeable, and already has a cemetary plot. My husband does not want to be tied to a particular nursing home but would rather set up a trust through a lawyer and have the trust assets held in the brokerage where his brother already has an IRA and other investments. Does anyone have experience in setting up this kind of trust which is not done with a funeral home? Would a lawyer be willing to do this without meeting the trust's beneficiary? It would be virtually impossible to get the brother out to a lawyer, plus he lives in a different city than we do and we don't know lawyers there. I supose the best thing is to just call law firms where we live and ask if they would do it. Our state is pretty generous in the limits for funeral trusts, and we have no idea if the whole amount would have to be spent when the time comes. And does anyone know if any remainder from such a trust would have to be turned over to the state's Medicaid program as part of asset recovery?

Financial Planning Funeral Planning Medicaid Spend Down Power of Attorney (POA)

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score 0 · Answer 1

You say that your state has generous funeral trust rules, can I encourage you to make every decision based on the Medicaid rules in the state that your BIL will be applying for assistance.

wwww.nelf.org is the place to go to find a certified elder law attorney for your brother in laws situation.

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score 0 · Answer 2

Thanks JoAnn, but as I've said, we're looking to set up a trust that isn't tied to a particular funeral home. My brother in law has no insurance policies so the trust would be set up from assets he has in a brokerage, i,e., remains of his IRA and mutual fund investments.

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score 0 · Answer 3

I had to cash in Moms insurance policies. I was allowed by NJ Medicaid to set up a funeral trust. It was part of Moms spend down. I went to our local Funeral home and they set up the trust. We then sat down and planned out Moms funeral. I was told that the cost of flowers, tombstone, luncheon and anything to do with the funeral could go into the trust. I think, if there is any money left over, it reverts back to Medicaid.

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score 0 · Answer 4

Thanks 97yroldmom, but my husband doesn't want to do burial or funeral policy through a nursing home as he feels it might be too restrictive.

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My inlaws had burial insurance policies that were not tied to a particular funeral home. While a funeral home probably made a commission on selling the policy, it allowed us to go to any funeral home to use the policy when they passed. They died within a month of one another and FIL funeral was handled by one FH and MIL by a different one. My aunt also has a policy that can be used at any funeral home. Call a few homes and inquire over the phone. Ask each one who their parent company is so you aren’t basically dealing with the same funeral home company. I also like how Joann handled her mom’s but that one does sound tied to a particular home.

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score 0 · Answer 5

I’m not familiar with a funeral trust. However there are funeral policies that can be taken at any funeral home. There is a burial policy and preneed funeral policy. Here is a link that explains both. Ask the certified elder attorney which is appropriate for a Medicaid recipient.
https://www.protective.com/learning-center/life-insurance/life-insurance-basics/is-burial-insurance-different-from-preneed-funeral-insurance/

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score 0 · Answer 6

I'm in MN and we are also in this process, but post-Medicaid, for my MIL. I don't get the impression you have to go through a lawyer for certain, but can do it through an insurance broker, but I'm not certain. I do know that if you set it up before Medicaid the amount you are permitted/protected is much higher than after.

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Logistics of POA setting up a funeral trust?

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