Open a protected savings account for your final expenses.
This irrevocable trust, also called a ‘funeral trust,’ acts as a protected savings account for funds to pay for a person’s funeral costs or final wishes.
If your status in Colorado is “Medicaid Pending” and you’ve been told you’ll need to “spend down” your assets for Medicaid approval, this is the first simple step.
The dollar-for-dollar trust works as a secure savings account for final expenses, ensuring you don’t overfund. You can choose a term of 1, 3, or 5 years that best fits your needs.
Needing to qualify for a Medicaid Spend-down?
The first step in qualifying should be the Funeral Trust Program.
- Immediate exemption from Medicaid, not subject to the “five-year look back” (Up to $15,000 in Colorado).
- Applicants are not required to go to a specific funeral home.
- No attorneys’ fees; the trust is already established.
Why Choose the Funeral Trust Program?
- Policy benefits are paid directly to the funeral home or cemetery.
- Creditors cannot attach funds used for funeral expenses.
- Policy benefits are tax-exempt.
- No attorney fees; the trust is already established.
- Immediate exemption from Medicaid.
- Applicants are not required to go to a funeral home.
- Families can permanently set aside money for funeral expenses.
- The Policy is portable to any funeral home in all 50 states.
“The funeral trust program is the easiest and quickest program that is used for immediate Medicaid asset protection that I have seen and used.”
Scott Behan
Certified Preplanning Consultant
Author: Funeral Funding Made Simple
& Speaking from The Heart: Advanced Funeral Planning
What does this type of trust do:
First, I am not a Certified Medicaid Planner or an attorney. This is an insurance product that protects your final expense funds from Medicaid spend-down and a 5-year lookback.
Always seek advice from a qualified attorney regarding all legal concerns.
Anyone, ages 0 to 99
The funeral trust has no underwriting, so everyone qualifies!
Protected by an insurance co.
The funeral home does not handle the money. The insurance company safeguards it.
Paid out income tax-free
Always going to be paid out income tax-free to the funeral home and/or estate.
Dollar for Dollar plan
You choose how much you can pay and select a 1-, 3-, or 5-year plan, then cover what you can.
Doing nothing can cost
Medicaid reduces elderly people’s allowable assets to just $2000 if not protected.
The funds are guaranteed
Funds are immediately available and paid within 48 hours of the claim.
“Once you find yourself incapacitated and medicated, it’s like missing the boat to get your ducks in a row — trust me, it’s a lot harder to organize your life in the middle of the chaos.”
Dan Wilson
Licensed Life and Health Insurance Agent | MedPending Colorado Rep
Are there payment options?
An ideal plan for someone on a fixed income who wants to set aside some money while staying within budget is to select what you can afford, starting at $25/mo.
Single Pay
A single lump sum payment to an irrevocable trust protects it.
1-year plan
Monthly payments over 12 months.
3-year plan
Monthly payments over 36 months.
5-year plan
Monthly payments over 60 months.
stories
1. The Proactive Plan: The Chen Family (Had an Irrevocable Trust)
The Setup
Four years before Mrs. Chen needed care, she and her husband, Mr. Chen, met with an elder law attorney. They decided to create an Irrevocable Trust. They transferred some primary non-exempt assets (a little savings and a modest brokerage account) into the trust.
The Setup
In 2025, four years after establishing the trust, Mrs. Chen suffered a significant stroke and required skilled nursing home care, which cost $12,000 per month. Their assets were insufficient to cover this indefinitely.
The Outcome (No Spend Down on Trust Assets)
When they applied for Medicaid, the assets in the Irrevocable Trust were not counted because they had protected the funeral costs. Their “spend down” consumed her existing assets and Mrs. Chen’s monthly income, which was contributed toward her care cost. The Chen family celebrated her life like she would have wanted, preserving their legacy.
2. The Late-Stage Panic: The Miller Family (Money given away within the Look-Back Period)
The Setup
Mr. Miller, a widower, was diagnosed with early dementia in 2022. Concerned about his declining health, his daughter quickly met with a friend who advised transferring assets totaling $300,000 out of dad’s accounts in January 2023.
The Event
In January 2025, just two years after moving assets and funds, Mr. Miller’s condition worsened, and he needed immediate long-term care.
The Outcome (Medicaid Penalty Imposed)
When his daughter applied for Medicaid, the state reviewed her financial records. Because the $300,000 was transferred within the five-year look-back period, Medicaid deemed it an improper transfer to qualify for benefits. They calculated a penalty period (a period of ineligibility) by dividing the transferred amount by the state’s average monthly cost of care (let’s assume $10,000).
The Miller family had to find a way to pay for Mr. Miller’s care for 30 months before Medicaid would begin covering his expenses. They had protected the assets, but they were not yet “safe.” They ended up having to take out a reverse mortgage on the home (an asset they had intended to protect) to cover the care costs during the penalty period.
3. The Unprepared: The Garcia Family (No Trust)
The Setup
Mr. and Mrs. Garcia believed they would always be healthy and relied on their Medicare and modest savings. They never engaged in long-term care planning and only had simple Wills. Their only significant asset was their home, valued at $400,000, and they had $150,000 in a joint savings account.
The Event
In 2024, Mrs. Garcia fell and required permanent residency in a long-term care facility.
The Outcome (Forced Spend Down)
To qualify for Medicaid, Mrs. Garcia could only have a minimal amount of countable assets (e.g., $2,000). The state allowed Mr. Garcia (the “community spouse”) to keep the home (as long as he lived there) and a protected amount of the joint savings (the Community Spouse Resource Allowance, or CSRA, which varies by state but can be around $137,400). However, their combined $150,000 was slightly over the allowance.
The Garcia family was required to “spend down” all non-exempt assets above the allowance. In this case, they had to spend the excess of their savings on Mrs. Garcia’s care until they met the eligibility threshold. While the house was protected during Mr. Garcia’s lifetime, after his passing, the state’s Medicaid Estate Recovery Program (MERP) could potentially place a lien on the home to recoup the costs of Mrs. Garcia’s care. Their legacy was vulnerable.
4. The Hidden Risk: The Wilson Family (A Revocable Living Trust)
The Setup
Mr. and Mrs. Wilson were told a Revocable Living Trust was essential for avoiding probate, so they established one five years ago, placing their home and investments inside. Crucially, they retained the power to take the assets out whenever they wanted.
The Event
In 2025, Mr. Wilson developed Alzheimer’s and needed long-term care.
The Outcome (The Trust Was Countable)
When Mrs. Wilson applied for Medicaid, the state reviewed the terms of their trust. Because a Revocable Trust allows the person to take their assets back at any time, Medicaid considers the assets held in it to be “available” to the applicant.
The home and investments were not protected. The family was forced to sell the investments and faced the same “spend down” scenario as the Garcia family, using nearly all the savings in the trust to pay for Mr. Wilson’s care until the asset limit was met. They avoided probate, but they did not achieve Medicaid asset protection.
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