Nursing Home, Medicaid, and Burial Fund

[landlord51]

What is the name of your state (only U.S. law)? PA

Hi,

I’m POA for an aunt who was just recently moved to a nursing home. I’m her only family survivor. Right now the Medicaid application is pending since she’s been there only a few weeks. I’ve gotten very inconsistent instructions on what to do about funeral and burial costs. The welfare office (though they haven’t said specifically) won’t allow the continuation of the policy and forces the person to cash it at face value. The face value is about $3,000, but the actual value is around $12,000. I suspect the policy was paid into for about 30 years and was always intended for funeral/burial purposes. So in order to pay for a respectable burial (which is closer to 10K), the face value plus her other assets will have to cover for this.

Some have suggested opening a separate account for this. But then who looks after it? Me? I hear Pennsylvania allows 11K for these expenses. But I don’t know what this means – how do they “allow” it? They mean, they’ll cut a check to cover costs?

QUESTION: Do I hire lawyer to “look after” an account like this? I don’t know what to do. I haven’t even cashed in the policy and now another bill is due this month. No one – neither the welfare officer nor the nursing home has given me a straight answer on this. Do I trust the state of Pennsylvania to make sure the money is put aside to be used properly, or have I relinquished her right to a decent burial and funeral for my loved one because she’s in a state-funded facility? That is, unless I pay for it.

Thanks for any advice or comments.

 

[Kiawah]

I've been thru the Medicaid process with my MIL in PA. It varies county by county, each county having their own processing.

I found the state VERY helpful in explaining all of the details.

There is a clip level for the amount of life insurance policy allowed. My MIL had 3 small policies, we had to cash out 2 to get under the clip level. That money was used for nursing expenses, as part of the 'spend down'.

You are allowed a pre-paid or irrevocable funeral expense trust. That had been in place, and prepaid the funeral home and cemetery charges. State will want copies of that policy, to prove it's irrevocable. The funeral home should help in that, they work up the services/charges, then fill out the paperwork for the irrevocable trust. There may be a third party company, who actually holds the contract. You pay the third party, when you need the funeral services, they pay the funeral home the agreed to contracted services, at the agreed to prices. Worked flawlessly.

Contact the funeral home to understand the services and costs, and how they handle these trusts. Then contact the PA state, to verify that everything will be okay if you sign up for that policy at the level specified. When they give you the green light, sign the paperwork at the funeral home, and then provide all of the copies back to the state for their records.

You may find 11K excessive for funeral expenses, but I don't know what county you are in and the general prices. You'll need to be reasonable/frugal with the spending.

After she passes, you'll be notified by the state that they have a claim against any remaining 'estate' that the aunt may have. So anything residual will go to PA. Keep good records of every single thing money is spent on. You will need very detailed records.

 

[landlord51]

Thanks for explaining this so well, Kiawah. I am right in the beginning of this and just got the required docs to the office for their evaluation, so maybe I'll get better instruction about it later. Still I did not know we would be electing a funeral home at this juncture.

I'm getting contradictory info already from nursing home v. county officer. The nursing home already informed me they've transferred over her ss benefits to a new account they set up for her that will start beginning of December and they're only required to pay for medical (her med insurance). That means there is a very limited amount of funds to keep her house going until it is sold (utilities, home insurance). They said they did this "through the doctors."

But I am relieved it sounds like there's an untouchable trust for funeral costs. I'm considering having the nursing home just control everything during the private pay period (after the house is sold). Let THEM keep a solid paper trail and detailed records, you know? But at least there will be a trust and pre-arranged funeral contract. That is a huge relief.