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We just sold my mother-in-law's vehicle.  She is still living independently, but eventually we need to sign her up for medicaid. The proceeds for her car are going to be set aside for her funeral expenses, but we did not want MO medicaid to come and take it away from her. How do we keep this money set aside for her to use up and until we have the funeral services paid for? Does it need to be in a specific account, or can we start a new account in my husbands name for her benefit? she has no other assets.

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A no-cash-value preneed could run 8 -10K. The places that do both the funeral & own the burial / cemetary site as well will be somewhat less. if they want to be buried in a catholic, jewish or other specfic religious cemetery those will have separate costs from FH.

Please keep all the paperwork. When eventually you do a Medicaid application for her (& it's renewals) the funeral /burial documents will need to be submitted. some states have a ceiling on preneeds (like 10k). For Medicaid compliance they must be no-cash-value, aka irrevocable.

So please make sure this is the way you want to do moms spend down. I will say based on my experience with my mom who did a pre-need, that there will be costs beyond what is in the FH contract, like floral, police escort, site prep & opening & closing of vault at the cemetrary. A lot of families now opt to do a cremation with a visitation at the FH or a "celebration of life" at a family members home it is just so much less. If mom is still living independently, does she have a emergency kitty for dental care, eyeglasses, spike in utilities, repairs to home, etc? if not, perhaps think if $ needs to be set aside.

Often families are not aware that once a elder goes into a NH and onto Medicaid, all monthly income (SS, retirement income) less a small personal needs allowance ($ 60 for most states) must be paid to the NH as their SOC (share of cost). They will have essentially no more income, no more funds, no $$, so if she needs dental work done or a good hearing aid or extra eyeglasses, or still has a house, or life insurance premium to pay for ....all those costs will fall to family to pay for.
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There has to be an actual burial contract with a funeral home. Go see the funeral home she prefers to do the service. Never put any of her assets in hubby's name or even a joint account, Medicaid frowns on that.
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