Prepaid Funerals

Should I buy an irrevocable funeral contract?

The decision whether or not you should buy an irrevocable funeral contract to help you qualify for Medicaid is up to you. There is no right or wrong answer.

If you are applying for Medicaid (Title 19) in the State of Connecticut, here are some things to consider:

• If your assets are more than the asset limit for Medicaid, you may need to reduce ("spend down") some of your assets. You may spend down your assets any way you want, including buying a funeral contract, as long as you do not give your money away (gifts or donations). You cannot pay more than the fair market value for something. For example, you paid $1000 to your church for a calendar or other inexpensive item. DSS would probably see this as a gift or donation which could affect when you could qualify for Medicaid.
   
• You may spend up to $10,000 for an irrevocable funeral contract in Connecticut. A prepaid irrevocable funeral contract is not counted as an asset for Medicaid purposes. If you decide to buy a funeral contract and are applying for Medicaid, it is in your best interest to buy an irrevocable contract.
   
• A prepaid funeral contract lets you make your own funeral arrangements in advance, rather than having the town/city, State or your family pay for your funeral. The town/city or State will not pay more than $1,800 for the burial of an indigent person. (Friends/Family can make an additional contribution of up to $3,400, totaling $5,200).
   
• You can transfer an irrevocable contract to a different funeral home if you move or do not want to use the services of the original funeral home. However, you cannot cancel and get your money back if you buy an irrevocable contract.