PRE PAYING FOR A FUNERAL
Some people choose to pre-pay for their funeral. Here is a list of reasons why people pre-pay:
- Someone does not want to burden their children or family with finances after their death.
- Some want to lock in funeral expenses to off set inflation.
- A family member may need to decrease someone's assets in order to qualify for Medicaid.
When someone is going to pre-pay for a funeral, they may also pre-plan it by going over information talked about above. Once someone has pre-paid for a funeral at our funeral home, prices for our services and merchandise are guaranteed. We do not guarantee cash advance items such as newspaper notices, flowers, clergy and cemetery fees etc. These items are provided by a third party and the funeral home has no control as to when and how much their fees will increase. However most people do include monies for these items on our pre-paid contract in order to have the bulk of them paid for.
For Medicaid purposes, the funeral home can be made an Irrevocable Beneficiary of an insurance policy. However this satisfies the requirement for Medicaid and does not constitute a pre-paid funeral contract. Therefore the funeral home's prices are not guaranteed. Prices at the time of death would apply and an At-need funeral contract would be signed by the family.
IRREVOCABLE AND NON GUARANTEED PRICE
For Medicaid purposes, the funeral home can be made an Irrevocable Beneficiary of an insurance policy. However this satisfies the requirement for Medicaid and does not constitute a pre-paid funeral contract. Therefore the funeral home's prices are not guaranteed. The funeral home has no control over where the insurance company would invest the money or even if the insurance company is still in business at the time of need. Prices at the time of death would apply and an at-need funeral contract would be signed by the family. Due to inflation, there may be a balance due from the family if the insurance proceeds do not cover the entire cost of the funeral.
If there are excess funds from the insurance and the final expenses are paid, and the decedent was receiving Medicaid, the funeral home CAN NOT refund any unused money to the family. Therefore the following would apply:
"According to a September 17, 2007 letter from the Ohio Attorney General's Office, funeral directors should ask the family members whether an estate will be opened for the deceased Medicaid recipient. If an estate will be opened, the check made out to the estate should be presented to the executor. Medicaid will then make a claim for those excess funds when it is notified by the probate court.
If the family member indicates that the estate will not be opened, the funeral home should still make any refund check payable to "the estate of (name of decedent)". However, rather that presenting that check to the family, the funeral home should mail the check to: Collections Enforcement Section, Ohio Attorney General, 150 East Gay St., 21st Floor, Columbus, Ohio 43215."
Taken from Ohio Funeral Directors Association Newsletter October 2007
This prevents a family from making the funeral home a beneficiary of a $100,000.00 policy, purchasing a $10,000.00 funeral and receiving the excess funds, all the while the decedent was receiving Medicaid benefits.
Although the funeral home has a Non Guaranteed Contract form to be signed, a form the Insurance Company denoting a change of beneficiary is required by Medicaid.