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Irrevocable Funeral Trusts: Helps Families with Expenses

Irrevocable Funeral Trusts A complete guide

In life’s intricate journey, preparing for the unavoidable brings a sense of calm amid uncertainty. Enter the world of Irrevocable Funeral Trusts (IFTs), a practical and considerate way to face the inevitable with grace and readiness. Having this as your own safety net allows you to ensure your final passage is arranged as you desire, relieving your loved ones of financial worries.


Exploring the world of IFTs is like opening a door to a prepared future. These trusts demonstrate responsible planning, enabling individuals to plan their final goodbyes while protecting their family’s financial stability.


This guide will take you deep into the realm of Irrevocable Funeral Trusts, revealing their core, operations, benefits, and important factors to consider. Let’s discover together how IFTs can serve as a source of readiness and peace when preparing for life’s inevitable end.

What Is an Irrevocable Funeral Trust?

Have you heard about an Irrevocable Funeral Trust (IFT)? It’s a special financial plan you set up while you’re alive to cover your future funeral and burial costs. This trust is like a dedicated account just for these expenses, making sure your preferences are followed and the funds are ready when needed.


Here’s something important about an IFT: once you set it up, it usually can’t be changed or canceled by you. This permanence guarantees that the money is strictly reserved for your funeral plans, giving you and your family a secure financial backup.

How Irrevocable Funeral Trust Works?

An Irrevocable Funeral Trust (IFT) works by specifically setting aside and protecting money for someone’s funeral costs. Let’s break down how it usually operates:



It all starts when you, as the person setting it up (the grantor), decide to create an IFT. You usually do this with the help of a funeral home, a bank, or a lawyer who knows about trusts.



You, as the grantor, decide how much money to put into the trust. This specific amount is reserved solely for covering funeral and burial expenses.


Trust Agreement

A legal document called a trust agreement is created. It lays out all the details of the trust, such as your funeral preferences, expenses, and how the money will be handled and paid out.



Once you’ve set up and funded the IFT, it usually can’t be changed or canceled by you. This guarantees that the money set aside stays only for covering your funeral costs.


Funeral Planning

The person setting up the IFT works together with their selected funeral home to plan and organize the funeral services they want. They can feel secure knowing that the money in the IFT is specifically reserved for these purposes.


Trust Management

The bank or the person managing the IFT makes sure that the money is used correctly to pay for the exact funeral costs when needed.


Pros & Cons of Irrevocable Funeral Trust

Let’s have a look on benefits and drawbacks of Irrevocable Funeral Trust

Pros of Irrevocable Funeral Trusts:


Financial Security

IFTs provide financial security by saving money specifically for funeral expenses, making sure these costs are taken care of without putting a financial strain on the family left behind.


Customized Funeral Planning

People setting up IFTs can plan ahead and customize their funeral plans, stating their preferences to make sure their wishes are respected and fulfilled.


Medicaid Exemption

Often, money kept in an IFT doesn’t count in Medicaid calculations. This helps people keep their eligibility for Medicaid benefits.


Relieves Family Stress

IFTs ease the emotional and financial burden on family members by funding and planning funeral arrangements ahead of time.


Protects Funds from Creditors

Assets put into an IFT are commonly safeguarded from creditors. This makes sure that the assigned money is saved only for covering funeral costs.


Cons of Irrevocable Funeral Trusts



Once established, an IFT is typically unchangeable, limiting flexibility and modifications to the trust terms.


Funds Accessibility

The money set aside in an IFT might not be available for other purposes or emergencies because it’s specifically reserved for funeral costs.


Potential for Unforeseen Expenses

Sometimes, if the money set aside in the IFT isn’t enough to cover all the funeral expenses because of unexpected situations, the family might have to pay for the extra costs.


What Expenses Can Be Paid with an Irrevocable Funeral Trust?

An Irrevocable Funeral Trust (IFT) is made to handle many different costs linked to funerals, making sure that different expenses for end-of-life plans are already paid for. Some usual costs covered by an IFT include:


  • Funeral Director Services: Fees associated with the services provided by the funeral director, including coordinating the funeral arrangements and handling necessary paperwork.


  • Casket or Urn Costs: Expenses for purchasing a casket or an urn as per the grantor’s preferences.


  • Cemetery or Burial Plot Expenses: Costs related to purchasing a burial plot or cemetery space for interment.


  • Embalming and Preparation Fees: Charges for embalming, dressing, and preparing the deceased for visitation or viewing.


  • Transportation Costs: Expenses associated with transporting the deceased to the funeral home, cemetery, or place of burial.


  • Grave Marker or Headstone: Costs for selecting, purchasing, and installing a grave marker or headstone.


  • Floral Arrangements: Expenses for floral displays, wreaths, or bouquets used for the funeral service or interment.


  • Memorial Service Costs: Charges related to holding a memorial service, including venue rental, clergy or celebrant fees, and audio-visual equipment if needed.


  • Reception Expenses: Costs for organizing post-funeral receptions, catering, and refreshments for attendees.

It’s essential to understand that the costs covered by an IFT can differ depending on what’s stated in the trust agreement and the rules set by the funeral home or financial institution handling the trust.


Value of Irrevocable Funeral Trusts

The value of Irrevocable Funeral Trusts (IFTs) lies in their multifaceted advantages, serving as a strategic and compassionate financial tool for individuals and their families:


Financial Security and Peace of Mind


Pre-funded Funeral Expenses: IFTs make sure that funeral and burial expenses are planned and financially protected. This relieves loved ones from the stress of paying these costs during a difficult and emotional time.


Financial Planning: People setting up IFTs can carefully plan and detail their funeral preferences, ensuring that their wishes are respected and paid for as they want.


Medicaid Eligibility

Medicaid Exemption: Money kept in an IFT is frequently not counted as part of Medicaid assets. This exception can assist people in maintaining their eligibility for Medicaid while also protecting funds for their funeral expenses.


Family Relief and Comfort

Reduced Emotional Stress: Planning and funding funeral arrangements beforehand relieve emotional stress for family members left behind. It enables them to focus on grieving and healing without worrying about finances.

Asset Protection


Protection from Creditors: Assets put into an IFT are usually protected from creditors. This guarantees that these allocated funds remain solely reserved for covering funeral expenses.

Personalization and Control


Customized Funeral Arrangements: The people setting up the IFT keep control and the power to make decisions about their final arrangements. This allows them to customize and shape their funeral services according to their own preferences.


What Is the Cost of Irrevocable Funeral Trust?

The price of establishing an Irrevocable Funeral Trust (IFT) can differ due to various factors. These include the type of funeral services chosen, where you are located, fees charged by the funeral home or financial institution, and any extra expenses. Here are important things to think about regarding the costs:


Factors Influencing the Cost

  • Funeral Service Selection: The cost of an IFT depends on the specific funeral services and arrangements chosen by the individual. Different services, casket choices, or burial preferences can impact the overall expenses.


  • Geographic Location: Funeral costs can vary significantly based on the region or city where the services will be held. Local market rates and expenses can affect the overall cost of setting up the IFT.


  • Administrative and Trust Fees: Funeral homes or financial institutions may charge administrative fees for managing the trust, drafting legal documents, or overseeing the trust’s disbursement.


Tips for Understanding Costs

  • Detailed Inquiries: When thinking about an IFT, it’s a good idea to ask about all the costs involved in advance. This includes getting a detailed list of fees for services and administrative charges.


  • Comparative Analysis: By comparing the costs and services provided by various funeral homes or financial institutions, you can make a well-informed choice about the most economical IFT option.


  • Transparency in Pricing: Look for clear pricing information and make sure you understand what services and expenses the IFT will include to prevent surprises with costs in the future.


Where to Purchase an Irrevocable Funeral Trust

Irrevocable Funeral Trusts (IFTs) are usually available from different trusted sources that specialize in funeral planning and managing trusts. Here are common places where individuals can get an IFT:


Funeral Homes

Direct Arrangements: Numerous funeral homes provide pre-planning services that involve establishing IFTs. They help in creating trust agreements and financing funeral expenses based on individual preferences.


Financial Institutions

Trust Departments: Banks, credit unions, or financial institutions frequently have specialized departments that manage different types of trusts, including IFTs. They can assist in setting up and managing the trust.


Estate Planning Attorneys

Legal Professionals: Estate planning attorneys specialize in making legal documents, such as trusts. They can help draft the needed trust agreements and ensure they meet legal requirements.


Online Funeral Planning Services

Online Platforms: Certain online funeral planning services offer choices to establish IFTs. These platforms provide information and help in creating trusts from a distance.


Recommendations and Research

Get advice from trusted sources, friends, or family who’ve set up IFTs. Also, check reviews about reliable providers to help decide. When choosing where to get an IFT, consider the credibility, reliability, and reputation of the provider. Pick a trusted source that gives clear terms, thorough services, and transparent details about setting up and managing the IFT.


Is Irrevocable Funeral Trust Medicaid?

Irrevocable Funeral Trust Medicaid is a planning method to safeguard funds meant for funeral expenses and keep eligibility for Medicaid benefits. Essentially, it means setting up an Irrevocable Funeral Trust (IFT) to protect funds for funerals while trying to maintain Medicaid eligibility.


Key Aspects of Irrevocable Funeral Trust Medicaid

  • Asset Exemption: Money placed in an IFT is frequently not included in Medicaid’s asset calculations. This means the funds inside the trust aren’t counted as assets for Medicaid eligibility.


  • Preserving Medicaid Eligibility: By putting money into an IFT, people aim to shield some of their assets from Medicaid’s spend-down rules. This planning helps them qualify for Medicaid aid while making sure that funds are set aside for funeral costs.


  • Strategic Financial Planning: Irrevocable Funeral Trust Medicaid helps individuals plan for their funeral costs by safeguarding those funds from being used to meet Medicaid-required spend-downs.

Irrevocable Funeral Trusts’ Impact on Medicaid Eligibility

Irrevocable Funeral Trusts (IFTs) can have a significant impact on Medicaid eligibility. Here’s how IFTs may affect Medicaid eligibility:


Impact on Asset Calculation

Exemption from Medicaid Asset Calculations: Money placed in an IFT is often left out from Medicaid’s asset calculations. This means that the assets in the trust usually aren’t considered part of an individual’s total assets when deciding Medicaid eligibility.


Preserving Medicaid Eligibility

Asset Preservation: When people put money into an IFT, they try to safeguard some of their assets from being counted towards Medicaid spend-down rules. This smart financial planning helps them qualify for Medicaid help while also making sure a specific amount is set aside for funeral expenses.


State-Specific Regulations

Differences in Medicaid Rules: Medicaid rules about asset exemptions, IFTs, and eligibility criteria can differ from state to state. It’s important to know the particular regulations that govern IFTs and Medicaid in the state where you live.


Considerations for Medicaid Planning


Timing and Look-Back Periods: Medicaid has look-back periods to review asset transfers. Establishing an IFT well in advance of needing Medicaid assistance is crucial to avoid complications related to eligibility.


Professional Guidance: Seeking advice from financial advisors, estate planning attorneys, or Medicaid specialists can provide clarity on how an IFT may impact Medicaid eligibility and ensure compliance with state-specific regulations.


How Irrevocable Funeral Trusts Help Persons Qualify for Medicaid

Irrevocable Funeral Trusts (IFTs) can strategically assist individuals in meeting Medicaid’s asset eligibility requirements by safeguarding a part of their assets specifically for funeral expenses.

Here’s how IFTs assist individuals in qualifying for Medicaid:


Asset Exemption

Exclusion of Trust Funds from Asset Calculations: Usually, money placed in an IFT is not considered in Medicaid’s asset calculations. This means the assets inside the trust often don’t count toward an individual’s total assets when deciding Medicaid eligibility.


Asset Protection

Preserving Designated Funds: When people put money into an IFT, they safeguard some of their assets specifically meant for funeral expenses. This action helps protect assets from Medicaid spend-down rules while ensuring that these funds are reserved for their intended purpose.


Medicaid Spend-Down Planning

Strategic Allocation of Funds: IFTs enable individuals to set aside money for funeral expenses that fits within Medicaid’s asset limits. This smart financial planning ensures that a specific amount is protected for funeral costs while also meeting Medicaid’s eligibility requirements.



Look-Back Periods: Medicaid has look-back periods to review asset transfers. Establishing an IFT within the applicable look-back period can be essential to ensure compliance with Medicaid regulations.

State-Specific Regulations: Medicaid rules can vary by state, impacting how IFTs are treated regarding asset exemptions and eligibility. Understanding state-specific regulations is crucial for effective Medicaid planning using IFTs.


Professional Guidance

Getting guidance from financial advisors, estate planning attorneys, or Medicaid specialists can offer individuals personalized strategies to use IFTs effectively in Medicaid planning. This helps them adhere to regulations and eligibility criteria.



In summary, an Irrevocable Funeral Trust is a valuable financial tool enabling individuals to plan and finance their funeral arrangements ahead of time. It offers financial security, maintains Medicaid eligibility, and guarantees the fulfillment of final wishes. When thinking about an IFT, it’s important to do comprehensive research, comprehend related expenses, and seek advice from professionals to make well-informed decisions about end-of-life planning.

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