Medicaid Title 19 and Irrevocable Funeral Trust Contracts in Connecticut

Title 19, or Medicaid, allows Connecticut residents to set aside funds to pay for burial expenses as part of the spend-down process.  In 1997, the State of Connecticut General Statutes 42-207 allowed an Irrevocable Funeral Trust to be funded up to an amount of $5,400 (Rhode Island allows $15,000).  Life Insurance policies cannot exceed $1,500 if applying for Medicaid.

An Irrevocable Funeral Trust is an exempt asset from Medicaid spend-down regulations.  It is not subject to the five year look back rule.  Proceeds from the policy may be paid to any funeral home in the country.  That means if you move to be closer to your children or to a warmer climate the funds are not committed to one particular funeral home.  

Excess benefits would be returned to the estate of the insured.  Some of the other benefits are as follows:

1. Income tax exemption for benefits.
2. No attorney fees as the funeral trust would already be established.
3. The applicants do not have to register at a funeral home, less stress.
4. Families would know funds have been set aside.
5. The Funeral Trust can be used in all 50 states.
6. Benefits are paid directly to the funeral home or cemetery.
7. Excess policy benefits go to the estate of the policy holder. 
8. Irrevocable Funeral Trusts cannot be attached by creditors.
9. Policy loans are prohibited. IFT is a permanent arrangement.
10. There are no physical examinations required.
11. The IFT policy is a single premium policy and may be paid with a 1035 exchange from an existing life insurance policy.
12. Peace of mind knowing funds are set aside and family will not have to bear the expense.

When meeting with an attorney or a Case Worker to apply for Title 19 you will need to bring the following items with you:

• Copy of birth Certificate (also for spouse, if applicable)
• Copy of bank statements for the last 5 years (60 months from date of Medicaid application) from Savings, Checking, Credit Union, Pensions and Social Security (also for spouse, if applicable).
• Copy of Stocks, Life Insurance Policies, Bonds (plus copies of cashed out values of the same for the last five years).
• Copy of unpaid medical bills
• Copy of medical insurance card (also for spouse, if applicable)
• Copy of payments made for mortgage, lease or rental and the agreements or contracts for same.
• Copy of bills for living expenses: cable, phone, electricity, oil, gas, utilities, insurances, etc
• Copy of the Irrevocable Funeral Trust
• Copy of Conservator-ship documentation or Power of Attorney (if applicable).

Medicaid is a state and federally funded program to reimburse medical care providers, including nursing homes, for qualified low income individuals age 65 or older, disabled or blind.  Since Medicaid is only available to people with limited income an Irrevocable Funeral Trust is a way to insure that funds are available for final expenses.  Consult with a Medicaid Case Worker, a CPA or an Elder Law Attorney for more information on how to spare your grieving family and friends the added financial and emotional burden of funeral costs.

Will Morrissey

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