  IntroductionMany New York residents prearrange and prefund their funerals as part of regular estate planning. In fact, many consumer advocates applaud the concept. Reasons for preplanning one's final expenses include peace of mind, relieving the burden on loved ones, or for purposes of SSI/Medicaid spend down. Advantages of Planning Ahead There are a number of advantages to preplanning and prefunding funeral expenses. The primary advantage is that it allows individuals the opportunity to make personal and specific selections for the funeral service that most closely meets their needs. For many, it is comforting to know that money has been set aside for their final expenses, which will in turn reduce the burden on family members at a difficult time. In addition, loved ones are not left guessing which type of funeral service would have been preferred. Another very important reason to establish a preneed burial trust is that SSI/Medicaid recipients are allowed to set aside money to fully fund the service of their choice before their funds are exhausted down to necessary eligibility levels. Consumers in New York State benefit from the strictest, most comprehensive funeral preneed laws in the country. In New York State, 100% of the principal and interest must accrue to the benefit of the Trust (less a third party Trustee administrative fee), which must be deposited in an investment backed by the government of the United States. For this purpose, many New York funeral directors use NYSFDA's funeral preneed trust program, the PrePlanSM. PrePlanSMis a commingled trust invested solely in FDIC insured certificates of deposit. Five Trustees, who are members of the New York State Funeral Directors Association and are carefully appointed by the NYSFDA Board of Directors, oversee the operations of the trust. PrePlanSM currently services 40,000 consumer trust accounts for over 500 funeral firms. SSI, MEDICAID AND MEDICARE..... Which is Which? There is often confusion about what each of these programs provide, specifically Medicaid and Medicare. Below are brief descriptions of each: Medicare Medicare is authorized under the Social Security Act and is part of a national health insurance program for the aged and certain disabled persons. Medicare is administered by the Health Care Financing Administration under the US Department of Health and Human Services. Medicaid Medicaid is a joint state-federal health insurance program for low-income individuals. It is administered by individual states with federal oversight and regulation by the Health Care Financing Administration. Currently, all resources placed in an irrevocable funeral fund are excluded when an individual applies for Medicaid. Revocable contracts as an excludable resource are limited to $1,500. Please note that the revocable $1,500 limit is reduced proportionally by any irrevocable funeral funds or insurance policies. State Medicaid plans are currently linked to federal SSI eligibility criteria, however, individual states make their own Medicaid determinations using the federal SSI criteria. Supplemental Security Income (SSI): SSI is a means-tested, federally administered income assistance program that provides monthly cash payments to the needy, aged, blind and disabled in accordance with uniform nationwide eligibility requirements. SSI is administered by the Health Care Financing Administration under the US Department of Health and Human Services. The limit on countable resources for SSI is $2000 per individual and $3000 per couple. All irrevocable preneed funds are excluded and any revocable preneed funds of up to $1,500* for funeral expenses and unlimited burial space expenses (funeral merchandise) per individual are excluded, with limited exceptions, for SSI eligibility purposes. Email: info@gannonfuneralhome.com |
