Using Irrevocable Burial Trusts for Medicaid Asset Protection in Virginia

As a certified elder law attorney in Virginia, I’m often asked about strategies to protect assets when planning for Medicaid eligibility. One effective tool is the Irrevocable Burial Trust. This article will explain how burial trusts work for Medicaid planning and compare them to prepaid burial plans.

What is an Irrevocable Burial Trust?

An Irrevocable Burial Trust (IBT) is a small, guaranteed-issue life insurance policy that is irrevocably assigned to a burial trust. The funds in the trust are used to pay for burial and burial expenses upon the death of the insured.

Key Benefits of Irrevocable Burial Trusts for Medicaid Planning:

• Assets in the trust are exempt from Medicaid’s asset limit calculations
• Does not violate Medicaid’s 5-year lookback period
• Allows flexibility in choosing a burial home
• Covers all burial expenses

Virginia’s Asset Limit for Irrevocable Burial Trusts

In Virginia, Irrevocable Burial Trusts are exempt from Medicaid’s asset limit as long as the amount transferred into the trust will be used to pay for funeral items.

Comparison to Prepaid Burial Plans

While both options set aside funds for burial expenses, there are some key differences:

Prepaid Burial Plans:

• Contract with a specific burial home
• Limited flexibility if you move or change preferences
• Risk of burial home going out of business

Irrevocable Burial Trusts:

• Not tied to a specific burial home
• More flexibility in burial arrangements
• Funds managed by an insurance company, reducing risk

Using Irrevocable Burial Trusts in Crisis Medicaid Planning

Burial trusts can be especially useful in crisis Medicaid planning scenarios. They offer a simple way to spend down excess assets quickly while preserving funds for an important future expense.

For married couples, each spouse can have their own burial trust.

Working with an Elder Law Attorney

While burial trusts can be an effective Medicaid planning tool, it’s important to work with an experienced elder law attorney to ensure they are structured properly. Improper use could result in Medicaid penalties or ineligibility.

As a certified elder law attorney, I can help you determine if a burial trust makes sense as part of your overall Medicaid planning strategy. Please contact our office to schedule a consultation to discuss your specific situation.

This article provides general information and should not be construed as legal advice. Please consult with an attorney for guidance on your particular circumstances.