Is a prepaid funeral a proper way to do Medicaid “spend down”?

Q. My father is in a nursing home applying for Medicaid. My mother wants to pay for burial costs now. Would this be a bad thing, applying for Medicaid? My father is already in nursing home and afraid Medicaid will take all of his money.

A: Any “spend down” should be done as part of the spending down provisions through a Medicaid eligibility application. Certain prepaid funeral arrangements are Medicaid exempt, it would be a really, really bad idea to make prepaid funeral arrangements with the idea of protecting assets when long term care is needed UNLESS the arrangement is part of Medicaid planning under auspices of an elder law attorney. Why? Because prepaid funeral arrangements are exempt only if they satisfy state requirements, an arrangement that doesn’t meet state requirements can cost thousands of dollars by delaying eligibility, and a prepaid funeral may or may not be the most cost effective technique in different situations. It is well worth consulting a local elder law attorney.