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

My short bio

We all have a lot to be thankful for on Memorial Day weekend.  Joe Curreri, my sister Karen's son, lost his life in the Philippines in the war on Al Queda.  Like so many Americans we will be thinking of a lost loved one who gave all so that we may be free.  Thank you, Joe, God Bless you and God Bless the United States of America.

The Other "Mortgage Insurance"

New homeowners face a barrage of sales pitches. In addition to lawn care and furniture, those pitches invariably include mortgage life insurance, which promises to pay off your home if you die. Since your mortgage is probably your biggest financial commitment, this sounds great in theory. But here's why you're probably better off buying a personal life insurance policy instead.

The Other "Mortgage Insurance"

Don't confuse mortgage life insurance with private mortgage insurance, known as PMI. PMI doesn't protect your family — it protects your lender from the risk that you'll default on your mortgage. It's typically required if your down payment or equity is less than 20% of the home's value.

Mortgage insurance may leave your family short. "The financial impact of your death extends far beyond mortgage payments," says USAA CERTIFIED FINANCIAL PLANNERTM practitioner J.J. Montanaro. "If you only cover your mortgage, your family may still struggle to make ends meet." Montanaro recommends calculating your total life insurance needs, considering additional needs like college tuition and supplementing your survivor's income.

It may not be a bargain. Often, mortgage life insurance is issued regardless of how healthy you are. "That's helpful if you've had serious medical problems," says Montanaro, "but policies that take everyone usually cost more." The bottom line? If you're healthy, you may be able to get more coverage for less money by buying a level term life insurance policy

Your security blanket may have holes. Check the fine print — many mortgage insurance plans only pay off if you die from an accident. "Your family will face the same hardship no matter how you die," says Montanaro, "so it's important that your life insurance coverage is comprehensive."

It isn't always portable. If you buy the coverage from your lender, it may disappear if you refinance. "Just as you want to avoid depending on your employer's life insurance coverage, in case you change jobs, you should also make sure your insurance isn't going to vanish just because you found a better mortgage," says Montanaro.

The proceeds may bypass your loved ones. Some mortgage insurance plans automatically pay off your loan no matter what situation your family faces at your death. "An individual life insurance policy lets you name your spouse or children as beneficiaries, giving them flexibility to pay off the mortgage when they feel the time is right," says Montanar

The benefits may vanish before your eyes. Some mortgage insurance benefits gradually decline in an attempt to match the declining balance of your debt. "Those plans are like a runaway train," says Montanaro. "You may move into a bigger house with a bigger mortgage, but the death benefit keeps shrinking anyway. Buying an individual life insurance policy keeps you in the driver's seat, letting you lower the benefits as you see fit."

https://www.usaa.com/inet/pages/advice_Mortgage_Life_Insurance?akredirect=true

Retirement: A Ticking Time Bomb for Independent Workers

Reuters published the article, “As More U.S. Workers Go Independent, a Retirement Time Bomb Is Ticking,” discussing this retirement time bomb. It reviewed the lack of retirement planning and the underfunding of retirement plans for self-employed workers. As it stated, “If you ask self-employed workers about retirement savings, a shocking number will give exactly the same answer, ‘What retirement savings?’”

This is a major problem, not only for the self-employed, but for the United States as a whole. With more and more people without regular jobs and the benefits that come with them, the article says that our nation faces a ticking retirement time bomb.

Here’s why:

• 28% of the self-employed were not saving at all, and another 40% were only saving occasionally, according to TD Ameritrade Holding Corp.’s Self-Employment and Retirement Survey.
• 40 percent of the workforce will be freelancers, contractors and temp workers by 2020, according to a study by Intuit.

While the traditional way of saving for retirement wasn’t designed for the freelance culture, those working on their own need to take responsibility for their retirement. The article highlights some of the methods available, including:

• For those who have a large profit margin each month, a simplified employee pension individual retirement account (SEP-IRA) may be appropriate. Contribution limits are much higher than for traditional IRAs: 20% of income, or $52,000 (whichever is less) in 2014. (Consult IRS
• For those with less to save, a traditional IRA or a Roth IRA will probably be a good fit. Those have annual contribution limits of $5,500 (plus an extra $1,000 for people over 50).
• For those whose cash flow is erratic, as often is the case with freelancers, then a percentage system may be more appropriate, allocating a specific percentage of earnings each month to retirement.

Time is of the essence to get the self-employed to start saving. According to the article, only a third of all Americans are contributing to 401(k)s right now, and if these workers are not motivated to plan for retirement, the retirement-savings system will become even more broken than it already is, and government funded programs are not the solution.

Also keep in mind that life insurance, disability insurance and long-term care insurance need to be part of the overall plan. If you die before completing your retirement savings goal, or become sick and are unable to work, you must still have resources for you and your family to fall back on. Insurance can provide this safety net.

January 27, 2014 | Marvin H. Feldman, CLU, ChFC, RFC, President and CEO of the LIFE Foundation | 1 chat

by Marvin H. Feldman 

Will Morrissey

Mystic Shore Insurance

(860) 984-6762

@WillMorrissey

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