Hi, I’m Kevin Gray, president of Star of David Memorial Chapels. Today I’d like to talk about pre-arrangement, specifically the difference between a revocable pre-arrangement and an irrevocable pre-arrangement. When someone writes a pre-arranged funeral in New York State, it’s typically defaulted to what’s considered revocable. What that means is any plans that are made can be changed. Any monies paid in advance can be refunded if services aren’t used, if families moved away and doesn’t require our services anymore. All monies paid in, all interests that accumulated gets returned to the family. If, however, the person being planned for is a Medicaid applicant or recipient, the plan has to be written in what’s known as irrevocable form. What that means is the same concept of planning in advance, paying in advance, the difference being if changes are made, monies can never be refunded back to the family. The reason for this is a protection of Medicaid’s interests.

Years ago, people would put a plan in place to shelter money from Medicaid only to make changes at the last minute looking for a refund, basically defrauding Medicaid. So Medicaid changed the rules. If someone is going to receive the benefits of Medicaid, they’re allowed as a strategy to put a plan in place to shelter the assets of the person being prepared for. However, that sheltering means they can never pull any money out. Although you can change the components of the service, you can add things to it. There’s no refunds whatsoever. When someone is considered a Medicaid applicant or recipient it’s an advice strategy by elder care planners that a funeral arrangement be put in place. Doing so shelters money that when Medicaid takes a five-year look back at where funds went for the person who’s the applicant or recipient, funds earmarked for a funeral arrangement are considered non-countable assets and can never penalize a family for having spent money. That’s one of the reasons why when we put a plan in place for someone that’s irrevocable, we’ll make suggestions like factoring in all of the anticipated costs associated with the funeral, aside from our fees. For example, the fees for a headstone, the fees for perpetual care at the cemetery.

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