Funeral Expense and Estate Planning Trusts
Krause Financial Services offers two irrevocable trusts that are issued by a commercial insurance carrier: the Funeral Expense Trust and the Estate Planning Trust. The trusts are offered at no cost to your clients, with no trust fees, and can be used in addition to any other trust they may already have. The process is simple, and the assignment to the trust is part of the application in many states.
With any irrevocable assignment, your client will not be able to surrender, loan or receive a premium refund after the free-look period. Your client will not be able to change ownership or beneficiary, and your client will not be able to change the policy face amount or plan. Until the irrevocable assignment is effective, the trust will not qualify for exclusion as an asset of the applicant.
Irrevocable Funeral Expense Trust
The Funeral Expense Trust is a trust controlled by the insurance company with the insurance company also being the owner and beneficiary. The trust will pay funeral costs with any excess funds going to the estate of the insured. The maximum investment amount varies from state to state; however, most states are limited to invest $15,000.* The Funeral Expense Trust protects funds from a Medicaid spend-down upon the effective date of the transfer.
The Estate Planning Trust
The Estate Planning Trust also is a trust controlled by the insurance company with the insurance company also being the owner and beneficiary. The funds are excluded from a Medicaid spend-down after five years. The maximum investment amount is $50,000.00. The Estate Planning Trust was designed for those families who have low to modest wealth, is guaranteed issue to age 99, avoids the need to draft a complicated trust agreement, and does not involve any fees.
New: The Estate Planning Trust has been expanded to include new multi-pay plans. This offering will help those clients who are unable to afford a lump sum payment, but can afford to make conveniently scheduled payments. The multi-pay plans consist of 3, 5, 7, and 10 years.
The aforementioned trust products’ availability may vary from state to state. Please contact a representative of Krause Financial Services to obtain more information.
* To see the individual state investment requirements, please contact a representative of Krause Financial Services.
