Value of pre-planning
Medicaid – benefits of pre-planning
Revocable vs. irrevocable
New Jersey Law makes provision for two types of deposits for pre-funding of funeral expenses, revocable and irrevocable.
Revocable: A revocable pre-planning account can be amended at any time by the purchaser to reflect their current wishes. There may be restrictions on policies cancelled or changed within the first twelve months.
Irrevocable with asset recovery: An irrevocable account is used for someone in the process of qualifying for Medicaid benefits. In the process of the Medicaid spend down, funds set aside for funeral expenses will not be considered an asset. However, the funds set aside in an irrevocable account can only be used for the funeral expenses. If there are any funds remaining after the funeral expenses have been satisfied at the time of death, those funds will be returned to Medicaid.
If you have an existing paid up whole life insurance policy and are in the process of a Medicaid spend down, talk to one of our pre-planning counselors before cashing the policy out. The law allows for an assignment of proceeds to protect the policy in the Medicaid spend down. We can advise you if your policy qualifies and how best to use the funds available in the policy.
