Is there any cost to set up a funeral expense trust?
No. The only "cost" to set up a funeral trust is the amount of money you set aside to prepay your final expenses. There is no additional cost to create the trust that protects your money from creditors and the Medicaid spend down requirement.
How much can I set aside in the prepaid funeral trust?
The maximum amount is $15,000.
Is underwriting required for the funeral trust?
No. There is one health question that must be answered on the application, but all applications are guaranteed to be issued.
Does money in the funeral trust earn interest?
Yes. Funds will earn a stated interest rate based on your age. Currently funds earn between 0.25% to 2.25% annually.
Is the growth from the interest taxable?
No. The interest is added to the death benefit and is therefore income tax-free.
Can funds be added to the funeral trust after it is established?
No. If additional funds need to be used for a funeral trust a second policy would need to be issued.
Can a family member sign the application for an ill parent?
Yes. An immediate family member may sign the application without requiring a Power of Attorney document.
Does a funeral trust cover cremation?
Yes. All costs associated with a cremation are covered.
Can I name my own beneficiary?
No. In order to protect the funds from creditors and Medicaid spend down, the NGL Funeral Expense Trust is the designated beneficiary. After the Trust pays the final expenses to the funeral home, the remaining funds in the policy, if any, will be paid to your estate.
Do I need to designate my choice of funeral home when establishing the funeral trust?
No. The funeral trust is valid at all funeral homes nationwide.
Can the funeral trust later be canceled or surrendered for cash value?
No. After the funds have been in the funeral trust for 45 days the policy becomes irrevocable. That provision is what guarantees funds are not available to creditors or Medicaid.
Can an individual apply for Medicaid immediately after establishing a funeral trust?
Yes. Although the standard wait time for the policy to become irrevocable is 45 days, there is an option to waive that provision and immediately transfer the policy to the Funeral Expense Trust. This option should only be used if the individual is seeking Medicaid assistance in the next 30 days.