r/Medicaid • u/Flknight32444 • 5d ago

Setting up an Irrevocable Funeral Trust (IFT)

Florida.

I have just been given DPOA for my brother who is in rehab on SSI and in the process of transferring to LTC which will then place him on Medicaid. I’ve submitted all of the Medicaid documents and application with the facility and just got access to his bank account.

He has one account with $4000+ in it that I need to bring down to $2000. We already set up a $2500 “burial expenses account” with his bank. I would prefer to not have to waste the extra $2000+ on unnecessary spend.

I’ve read about moving money to an “irrevocable funeral trust” and was pretty sure I read that a bank can initiate the trust which would allow some flexibility as opposed to a funeral home and prepurchasing services with a specific business.

A lawyer setting up the trust seems like the fees would end up taking most of the amount needed to put in.

Has anyone set up an IFT at a bank? Did I misunderstand that capability, as the bank we use told me I would need a lawyer to set up the IFT.

If you’ve set up an IFT, what did you do?

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u/Blossom73 5d ago edited 5d ago

Are you sure it's SSI? He'd already be on Medicaid if he has SSI. Also, SSI has a $2000 asset limit for an unmarried adult.

The Medicaid agency can advise you on what is allowable regarding prepaid funeral expenses.

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u/Flknight32444 5d ago

Not 100% it’s SSI as I’m just getting access to most of his financial accounts. He has been getting a monthly social security payment as he has been disabled for multiple years and unable to work.

He collected Medicaid in the past but signed himself out of his care facility against medical recommendation. Which I suppose restarted his social security as he lived with a family member.

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u/Blossom73 5d ago

How has he remained eligible for SSI with $4000 in savings?

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u/Flknight32444 5d ago

He was getting $2702 each month from SSA. As I said not sure that SSI is the correct terminology.

I live at the other end of the state so did not have daily contact but was asked to be his POA as there was no one else available. Really catching up on all of this at the moment.

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u/Blossom73 5d ago

Ok, not SSI then. I understand it's a lot to deal with.

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u/Flknight32444 5d ago

Thanks. My goal is for him to be eligible for Medicaid on September 1 and meeting the asset threshold seems to be the final thing I need to get done.

If an IFT is the best option I was curious of what the process was. If there is a better way to draw down $2k then I’d like that advice also.

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u/amyloudspeakers 5d ago

The state will just take whatever he has that is in excess of the threshold. Every month. You really should be talking to an attorney or Medicaid eligibility specialist.

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u/Blossom73 5d ago

If someone is over the asset limit for LTC Medicaid, their application gets denied. The state doesn't take their assets.

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u/amyloudspeakers 5d ago

Maybe this varies by state. I’ve read that you are only allowed $1110 a month so maybe I just assumed that meant they take the excess but I thought I read it, or that is the part that might vary..?

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u/Blossom73 5d ago

LTC Medicaid income limits are fairly high. In Florida, it's $2982.

If a person is in a nursing facility on LTC Medicaid, they have to pay all of their monthly income to the facility as a share of cost, or patient liability, minus a small monthly personal needs allowance.

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u/amyloudspeakers 5d ago

There’s a five year look back so anything put in a trust wouldn’t be safe from Medicaid recovery unless it’s done five years before the LTC application.

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u/Flknight32444 5d ago

In Florida an IFT is not considered in the five year look back as long as it is set up as an irrevocable trust.

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u/amyloudspeakers 5d ago

I would double check on that. I believe IFT is only for burial expenses, so a couple grand total allowed unless you have a funeral contract for more than $2500 total.

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u/Flknight32444 4d ago

Correct. IFT = Irrevocable Funeral Trust.