Prepaid burial expenses do not count as assets in the spend down process as other investments do. One can purchase cemetery property in advance of need as well as a gravemarker.
Funds for the funeral itself and the other necessary expenses can be placed into a trust account in a bank or into some type of life insurance product. Life insurance is often more advantageous since the growth on life insurance policies is tax free.
What happens if the family does not set aside funds for funerals in advance? Medicaid will not pay funeral expenses. The family has to come up with the money somehow. Family members may be forced to accept a form of disposition that is not consistent with their values or religious convictions.
THOSE WHO PLAN AHEAD CAN SAVE MONEY There is an irony at work here. Medicaid will pay medical expenses and the nursing home expenses. Medicaid will not pay burial expenses. Yet, by prepaying funeral expenses with money that will otherwise go to the nursing home or for other qualified expenses, your family can avoid paying these expenses in the future.
SUMMARY So then, Arkansas has no state burial benefits. Counties are obligated to pay for the destitute and friendless. (Counties are not obligated to pay for those who have the funds but do not want to spend them.) Only one member of a couple will be eligible for Social Security’s meager $255.00.
National cemetery benefits are worth thousands of dollars to veteran families who desire burial and qualify for cemetery privileges. However, even with this benefit, the funeral can cost $3,000 to $5,000 for funeral home services and to purchase a casket. It makes sense, therefore, to supplement these benefits with additional funds.
Insurance Funded Funeral Plans
Life insurance products offer a convenient way to set aside funds. There are many payment plans. Some choose a monthly investment that offers immediate protection and builds a reserve for the future. There are other investment possibilities as well.
Government Burial Benefits in Arkansas
STATE OF ARKANSAS No Arkansas state government agency provides a burial benefit. It is up to the counties to provide for those without friends or funds.
SOCIAL SECURITY A special one time lump sum death benefit of $255.00 is available to a surviving spouse or child under 18 of a worker who has Social Security coverage. There is no benefit at the death of the surviving spouse. This has the effect of restricting the benefit to just one member of the family. There is no benefit for those who have never married or who are divorced.
MEDICAID Medicaid is a program of the Federal Government administered by the various states. This program pays for a number of benefits for those without resources. Those who by health or circumstances are required to live in a nursing home often receive Medicaid. Throughout the lifetime of individuals, these benefits could add us to several hundred thousand dollars. But to receive these funds, one has to be without resources.
Normally, individuals are allowed only $2,000.00 in assets to be eligible for Medicaid. To get to this level, an individual must exhaust their savings, cash in life insurance policies, and sell their homes to pay their living expenses or nursing home expenses. A husband or wife is normally allowed to live in their home if the spouse is in a nursing home. Federal Law requires every state to recover what it spent for the care at the death of the second spouse. In some states, placing a lien on your home is part of the estate recovery act. This information may sound grim, but you can verify it very easily with anyone who has gone through the process of applying for benefits.
Many older couples have found themselves spending down their assets to qualify for Medicaid.