What is the Medicaid Spend Down Process?
What is the Medicaid Spend Down Process?
Let’s be honest, planning for your final years isn’t something that anyone looks forward to. Yet, it is an inevitable part of life and planning for it will alleviate a lot of stress for you and your loved ones. One way to do this is to create an irrevocable trust that will allow you to set money aside for future funeral expenses.
What is Medicaid and What is its Relationship to Irrevocable Trusts?
Most of us might have an idea of what medicaid is: a type of financial assistance for individuals and families that qualify. Rules vary state by state. Here in Rhode Island, there are three types of Medicaid:
Institutional/ Nursing Home Medicaid, which has an income limit of $2,382/month in order to qualify.
Medicaid Waivers/ Home and Community-Based Services, which has an income limit of $2,382/month as well.
Regular Medicaid , which has an income limit of $1073/month.
Nursing homes cost on average between $7000 and $8000 a month, which can be extremely prohibitive for spouses or the child/children of the individual who needs to/would like to live in such a setting. Medicaid can be extremely helpful in helping to pay for this. While you might have an income over these limits, there are ways of “spending down” your money in order to qualify. One of these ways is creating an irrevocable trust.
What is an irrevocable trust?
Just like the name suggests, an irrevocable is a non-changeable trust connected to your funeral home of choice, although this can usually be changed to another funeral home if you desire. Other changes can be made after it is created, however, it can be very difficult to do so.
The money put in to an irrevocable trust can only be used to cover funeral expenses, and is not counted as an asset when it come to qualifying for medicaid.
With an irrevocable trust, the cost of services is locked in and will not rise over time, so your family will not be hit with any unforeseen funeral expenses.
You can always connect with a Medicaid planner to help you see what you can do to qualify for medicaid. To find a medicaid planner, click here
For more information on Rhode Island Medicaid Eligibility, click here.
You can also, contact us here at Memorial Funeral Homes if you have an questions about funeral planning, irrevocable trusts or the medicaid spend down process.
Want to start planning now? Click here to start the process.
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