Why Should I Pre-pay Funeral Goods and Services?

First of all, prices always go up, they never come down.

Secondly, you will make all your choices for goods and services.  This will save your loved ones from additional preparation and decision making at a difficult time.

Thirdly, prepaid funeral plans and burial spaces are exempt assets for Medicaid eligibility purposes.  The amount that can be certified as exempt is set annually every June 1st.  In 2018-2019 the maximum irrevocable funeral allowance is $12,770.

A funeral plan refers to the prepayment of cemetery and/or funeral goods and services. Exempt burial spaces include cemetery plots, crypts, caskets, urns and/or niches including vaults, headstones, opening and closing the grave and contracts for its care and maintenance.

In addition, funds in an irrevocable prepaid funeral contract are exempt.  Such funds are best certified as irrevocable by issuance of a DHS-8A, Irrevocable Funeral Contract Certification.  This form is available from your licensed funeral director.

A funeral plan can be funded using life insurance or an annuity. A person purchases a life insurance policy and directs the proceeds to be used to pay for funeral goods and services.  It is best to irrevocably/permanently transfer ownership of the policy to a reputable, licensed funeral director who then transfers ownership to a trust.  These funds can be accessed by other funeral directors as well in the event you have moved.

Note:  These guidelines are established by the Michigan Department of Health and Human Services and are subject to change.

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