Adults who have elderly parents in Florida can understand their anxieties if they fear losing eligibility for Medicaid if they keep too much money for burial arrangements. Medicaid allows a recipient to set aside $2,500 for burial expenses that will not be counted as an asset. However, your parents should not have to choose between the burial they want and Medicaid spending. There are ways to harmonize Medicaid planning and your parents’ wishes.
The Florida Department of Children and Families website explains that, according to the Florida Medicaid Manual, your parents have the option of prepaying for a funeral and a burial and not have Medicaid count it as an asset. There is no limit to how much your parents can prepay for burial arrangements. However, the contract must be irrevocable. Once your parents pay the money, they cannot receive it back.
Florida law also allows for people to create a burial trust. The trust must be made in connection with a funeral director or a funeral home for Medicaid to count it in the same way as it would an irrevocable prepaid burial contract. A trust that is formed independently of a funeral director or home will only have up to $2,500 counted as a burial fee, with the remainder counted as an asset.
Prepaying for a funeral may seem like an attractive choice, but U.S. News and World Report cautions that prepayment plans do carry some risk. The funeral home your parents prepay to might go out of business. In the event your parents change their minds about their funeral plans, getting the money back may be impossible. It is also possible that a funeral director might turn out to be untrustworthy and pocket the money intended for the funeral.
There are other avenues that can be explored, such as burial insurance or having your parents put yourself or a trusted relative in charge of the burial money. When it comes to Medicaid planning, Florida families may need experienced legal help to understand all the possible options available to them.