This optional step is most often utilized for Medicaid eligibility
When you purchase a Precompose plan, you are purchasing a trust. By default, that trust is “revocable,” meaning you can receive a refund for 90% of the money you have paid at any time before services are administered. You also have the option to make the trust “irrevocable,” which means you give up the right to ask for a refund or make changes to the trust.
The most common reason to make a trust irrevocable is so that you or the recipient can qualify for Medicaid benefits. If neither you nor the recipient of the trust is seeking to qualify for Medicaid, making your Precompose trust irrevocable is probably not the best financial decision. You don’t need to do anything if you don’t want to make your trust irrevocable. If you wish to make your trust irrevocable, please feel free to contact us.
Revocable vs. Irrevocable Trusts
If you do not make the Precompose trust irrevocable, Medicaid could take funds from the recipient’s Precompose plan if they are in treatment and their other assets have been depleted. Medicaid could also take funds from your recipient’s Precompose plan if you, the purchaser, are in treatment and your other assets have been depleted. If the trust is still revocable, you can still access and use those dollars. Similarly, creditors can reach funds in revocable trusts, but typically not irrevocable ones.
If you purchase a Precompose plan for another person, verify that your purchase will not impact their Medicaid benefits or be claimed by their creditors. It may appear as an asset if you request Medicaid benefits or have creditors seeking to take your assets.
Making your trust irrevocable is a decision that cannot be reversed. Also, you can make your Precompose trust irrevocable at any future date. We recommend only making your trust irrevocable once you are certain of your choice.
Making a Trust Irrevocable to Qualify for Medicaid
If a funeral trust like Precompose is made irrevocable, it will not be counted as an asset by Medicaid. If you seek to qualify for Medicaid, purchasing Precompose allows you to transfer control of some of your funds to the Precompose trust to meet the Medicaid threshold. Your purchase of a Precompose trust does not violate the look-back period, which states an individual cannot transfer assets within a certain time of qualifying for Medicaid (the period includes the previous 60 months in most states). Medicaid benefits vary by marital status and by state and can change each year.
Other benefits may also be impacted by your purchase of a Precompose trust, including Supplementary Security Income (SSI). Please consult Medicaid.gov, your state’s Medicare provider, and your benefit administrator to confirm how establishing a funeral trust may impact your eligibility.
If you have questions about making your Precompose trust irrevocable, please contact us at precompose@recompose.life and a member of our team will get back to you shortly.