The planning tool that I want to highlight this week is known as Pre-Need Funeral Planning. This is a great benefits planning tool for long-term care Medicaid planning. In essence, those who choose to participate in this pre-planning opportunity can place $10,000 to $15,000 in a trust or insurance account with a reputable funeral home and that money is exempt from the Medicaid spend down. The unused portion is then generally distributed directly to the heirs/children of the deceased. In order to gain more insight into this process, I interviewed Cecil Burton, a long-time friend of mine and owner of Cecil M. Burton Funeral Home and Crematory. Cecil’s been in this area of practice for years now, and from him you can learn about the importance of pre-need funeral planning and why it’s a vital part of planning as you age.
How long have you been in the funeral business?
Close to 40 years. I’m third generation in this. I grew up in it.
How did you get into this industry?
I attended Gupton-Jones College of Mortuary Science in Atlanta, but then got my funeral and embalming license, so I’m an embalming and funeral veteran. Then after that I got my crematory license and opened my own crematory about six years ago, so I’m a certified crematory operator.
Why is it important to choose the right person to do your funeral planning and to do pre-needs funeral planning?
Well, it’s essential that you pick the right funeral home because we’re just like any profession, we have our good people and our bad people. 90% of them are good and do a good job, but you need to go and inspect the facilities and make sure that the people have their licenses and are certified to do pre-planning because in the state of North Carolina you have to have a license to do pre-planned funerals.
Full Video of interview on Pre-Needs Planning Here:
In order to be a licensed funeral rep, you have to have two licenses to be able to do a pre-planned funeral. We have a lot of people who are pre-planning their funeral now just for Medicaid reasons, the spend down. We put the money into an insurance trust where it gets interest on your money but it’s tax-free interest. We also do business with people who just want to pick out their stuff and lock in the price. We do that, too. You can pick your stuff, lock in the price, and it doesn’t matter how long it takes, it’s taken care of.
You’ve handled funerals for my family and many families in this area, in Cleveland County. Just to dispel the myths of a funeral home and things like that, it can really be – in my mind – it’s almost a ministry. You’re meeting and greeting families and helping them through an extremely important time in their lives, wouldn’t you say?
Our goal is to help them. It is a ministry, that’s what we say about our occupation. And what we want to do is help the family, guide them through the process, but also celebrate the life and honor the person who passed away, and help the family to honor the life that lived. That’s what we try to do and help them go through all the steps.
If somebody comes to you and says, “McIntyre at McIntyre Elder Law told me to come over here and I need to do a pre-needs funeral plan,” go through the steps; what would you do for that person?
Well, we’d find out what their needs are. Sometimes they have brothers or sisters who want to be in the process of picking out a casket or the vault for the cremation, and they can’t be here physically, so we’d help them. Then sometimes people want to just put money aside. We put that into a trust, and we trust 100% of the money and that way the money will get tax-free interest until the person passes away. For Medicaid, it has to be an irrevocable trust. This means they divorce themselves totally from that money; they can’t get that money out until that person dies. The money will sit in interest and then if something does happen, they have the principle plus interest to pick out the casket, the vault for cremation services when the brothers and sisters can be in on it.
Now, we have some people where the brothers and sisters are local and they want to go ahead, come in, and pick out the casket and vault for the cremation services to go ahead and pay for it, lock in the price. We do it that way also. That’s called inflation proof, which means you’re locking in the price. If you just put money in, it’s called a standard contract, which is the second type. Both of them for Medicaid have to be irrevocable. If you’re not doing Medicaid, you can always make it revocable meaning you can get the money out anytime you want, interest plus principle.
But it’s still your money, it’s still a countable asset under the Medicaid long-term care payment rules, and you’d have to deal with that aspect of it.
Right. One thing about a revocable contract, you can always make it irrevocable down the road. You can roll it over into irrevocable trust, but if it’s irrevocable you cannot roll it back. You’d have to get a judge.
How can people contact you if they want to know more information?
They can call my office at 704-480-8383.
Call me if you have any questions:
Greg McIntyre
Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street, Shelby
704-259-7040
