When one is applying for Medicaid / Title XIX, there are very limited assets that one may keep and still be eligible for the Medicaid benefit. In CT, the asset limit is $1,600 for a single individual. Nursing homes have an average daily rate of $390 a day, causing many to be in need of Medicaid at some point in their later years. Some people think they can give all their money to their children or others and still be eligible for Medicaid. They are wrong. Medicaid will not allow an individual to transfer assets within the five years prior to their Medicaid eligibility date. There are exceptions in which Medicaid will allow applicants to preserve assets.

Prepaid Irrevocable Funeral Trust /Prepaid Funeral Contract

Prepaying a funeral is just one of the very few exceptions of transferring assets. One may prepay up to $10,000 towards their funeral (2020). The funds set aside for the prepaid funeral must be put in an irrevocable funeral trust. This means that the trust is non-refundable and cannot be cashed in at any time. The funeral trust is portable and can be transferred to another licensed funeral home if one desires to do so.

Revocable Burial Allowance / Revocable Burial Space Contract

One may also set aside funds for their burial plot and burial items that are placed in a revocable trust, there is no limit on how much money one can spend on this. Some items that can be included are:

• Burial Plot; opening and closing expenses
• Headstone or Marker
• Crypt, Mausoleum
• Casket or Urn

These purchases do not have to be placed in an irrevocable trust – meaning that they can be refundable. If one refunds the purchases when the individual is already on Medicaid the funds must be given to the State. If the funds are not given to the State, the Medicaid recipient may be over the $1,600 asset limit and can potentially lose their Medicaid benefits. As long as the funds remain in the revocable trust, it will not impede the individuals Medicaid eligibility.
There are some other exempt assets that Medicaid allows an individual to keep. Look out for future posts on exempt assets and allowable Medicaid spend downs.