We were denied Medicaid because of a revocable funeral trust. Can an existing trust be made irrevocable?
Yes, a Revocable Funeral Trust can be converted into an Irrevocable Funeral Trust.
While Revocable Funeral Trusts and Irrevocable Funeral Trusts (IFTs) both provide a means to pay for burial and funeral expenses in advance, only Irrevocable Funeral Trusts are exempt from Medicaid’s asset limit. This is because Revocable Funeral Trusts can be changed and cancelled, while IFTs cannot be changed nor cancelled. Essentially, the assets in a Revocable Funeral Trust are still available to the Medicaid applicant, which is why this type of trust is counted towards the asset limit. Therefore, it will often push an applicant over the asset limit, disqualifying them from Medicaid eligibility. Since a Medicaid applicant cannot cancel an Irrevocable Funeral Trust and access the funds, this type of trust is exempt from Medicaid’s asset limit. Note that there are state-specific limits to the amount that can be put into an IFT.
Likely the best way to convert an existing Revocable Funeral Trust into an Irrevocable Funeral Trust is to cancel the revocable trust and then purchase an irrevocable one. For persons who wish to convert a funeral trust, it is best to contact a Professional Medicaid Planner for assistance.