Irrevocable Funeral Trust: 1st National Conference

[theinuranceguy]

I am wondering if anyone here is planning on attending the 1st National Conference on the Irrevocable Funeral Trust in Wisconsin on October 29th?

I will be attending it, and am looking forward to learn about the new "Family Estate Trust"

For people in the Senior Market who have not looked into this product, it may be something you may want to further look into (depending on your state).

So is anyone going?

Ramiz
Live Transfer Health Lead

 

[Newby]

Ramiz, what states is it available in?

I would be interested is selling this from what I understand about it, they can place up to $50,000 in there and it is protected after 5-years.

I don't think I'm going to be available to go to the meeting. I got an e-mail on it.

 

[patch36]

I work with lawyers helping folks with traditional type trusts. I also live in one of the 9 or 10 states with TOD type real estate deeds, so trusts are not as necessary to avoid probate as in the other 40 or so states. I do not know much about the Family Estate Trust, but what I am seeing when I Google gives me pause. Can you add to this?

Doug H. Moy
December 18, 2007
The family estate trust is one of eight abusive trust arrangements identified by the Internal Revenue Service (IRS; the Service). Not all family trusts, such as the revocable or irrevocable living trust, the credit shelter trust or by-pass trust, commonly used in estate planning are alike. With respect to estate planning, the family estate trust is perhaps one of the most egregious and troubling.

All sales final

Don't let irrevocable funeral trust be the death of your finances

By Chuck Jaffe, MarketWatch
Last update: 7:32 p.m. EST Nov. 20, 2007

BOSTON (MarketWatch) -- There are worse things than making a bad financial decision: death, for instance. But one thing that could actually make death worse would be having a bad financial decision tied to it.

And for many people, one such bad choice would be an "irrevocable funeral trust." Estate-planning attorneys and elder-law specialists say that a funeral trust is a good choice for people in very specific circumstances, so some people who have one may actually have made a smart move. But for most people such a trust is a financial killer.

Check out Personal Finance

From real estate to retirement, MarketWatch covers the topics that are vital to your pocketbook. Don't miss these recent winners:

• Perspective, not panic, is needed
• Paid tax preparers mess up
• Using an IRA for realty investing
• Boosts for volunteerism

Get our free PF Daily newsletter



An irrevocable funeral trust -- as sold by FuneralTrusts.com -- is a single-premium life-insurance policy, typically with a death benefit in the range of $10,000 to $15,000 that is designated for covering funeral costs.
It's different from preplanning a burial, however, because that is done in conjunction with a funeral home. A key selling point behind the trusts is headline-grabbing cases where funeral homes have gone out of business; another is that the trust provides flexibility in picking a service provider, so that the family is not locked into using a certain funeral home.
It is similar to that kind of planning, however.
A key issue behind funeral planning is the need for long-term medical care and the desire to shield some assets from nursing homes or Medicaid. Not only is there a carve-out that allows an individual to set aside money for a funeral, but money used for that purpose "beats the clock;" where most assets must be moved out of an individual's name and/or accounts well in advance of needing long-term care, funeral monies can come out on the eve of moving into the nursing home and just prior to needing Medicaid
"The idea behind a funeral trust is to allow a senior citizen to put some money aside so that if they do go into a nursing home, they have something set aside for their funeral, money that is exempt from Medicaid," says Mike Odell, national sales manager for FuneralTrusts.com. "We approach the funeral trust planning as Medicaid planning, and not from an investment standpoint."
Approached that way, estate planners and elder-law attorneys say the funeral trust makes sense, provided it's done at the last possible minute. There's no advantage to executing an irrevocable funeral trust well in advance.
The problems are buried, if you will, in the details.
For starters, the insurance company is the trustee of the trust, instead of someone you know.
"You're turning the money over to an insurance company, and then you will need the money quickly -- because funeral homes can be pretty demanding when it comes to payment -- and you have to wonder if the trustee has an incentive to pay the claim promptly," says Stephen Ziobrowski, an estate-planning attorney at Day Pitney in Boston.
"At the very least, you're creating another step in the dance of getting the money to the funeral home; when the time comes, you'll be rushing around to prove to the insurance company that they must pay the claim now. If they don't, you might have to come up with money to pay for the funeral while you wait for the claim to settle."

 

[Newby]

If it's an actual funeral trust, (through a funeral home) it is a good thing. I would argue that point with any attorney. BUT what the marketers are doing is marketing them as generic trusts that are irrevocable when they don't need to be and for more money than their funeral costs with no price guarantee. That's when I see some problems.

If someone puts $10,000, $20,000 or $25,000 randomly in an irrevocable funeral trust when they could have set up a price guaranteed funeral trust for whatever amount their funeral is actually priced at (usually minus a discount from the funeral home) they are overpaying.

If they set it up as irrevocable they have given up control of the money and there is no reason to do that unless they are applying for Medicaid today. There is no lookback period on a funeral trust so they should not make them irrevocable until they are ready to apply for Mediciaid.

If they overfunded and DO go on Medicaid, I don't think most of those families realize they lose the money they overfunded with to Medicaid. The money HAS to run through their estate and Medicaid gets what is in the estate.

Now an irrevocable trust that is NOT a funeral trust may make some sense and I think that is where the meeting Ramiz is talking about is headed. Those trusts are to protect funds from bankruptcy, medicaid, lawsuits etc and are effective after 5-years of being irrevocable. I think they are a good thing in a lot of situations, I just don't know how legal it is to promote them.

 

[theinuranceguy]

Ramiz, what states is it available in?

I would be interested is selling this from what I understand about it, they can place up to $50,000 in there and it is protected after 5-years.

I don't think I'm going to be available to go to the meeting. I got an e-mail on it.

We can sell the trusts for sure in:Texas Colorado Pennsylvania Virginia Nebraska Kansas South Dakota Illinois Wisconsin Ohio Arizona Idaho New Mexico Alabama Missouri Arkansas Louisiana Everything else is pending or has been applied for, there are some states that have been rejected.I will get more information on the new product when I go to the convention and will report back.I will have GA contracts available for those who are interested in marketing this product.Once I have all the details, I will share with everyone.
- - - - - - - - - - - - - - - - - -

I work with lawyers helping folks with traditional type trusts. I also live in one of the 9 or 10 states with TOD type real estate deeds, so trusts are not as necessary to avoid probate as in the other 40 or so states. I do not know much about the Family Estate Trust, but what I am seeing when I Google gives me pause. Can you add to this?

Doug H. Moy
December 18, 2007
The family estate trust is one of eight abusive trust arrangements identified by the Internal Revenue Service (IRS; the Service). Not all family trusts, such as the revocable or irrevocable living trust, the credit shelter trust or by-pass trust, commonly used in estate planning are alike. With respect to estate planning, the family estate trust is perhaps one of the most egregious and troubling.

All sales final

Don't let irrevocable funeral trust be the death of your finances

By Chuck Jaffe, MarketWatch
Last update: 7:32 p.m. EST Nov. 20, 2007

BOSTON (MarketWatch) -- There are worse things than making a bad financial decision: death, for instance. But one thing that could actually make death worse would be having a bad financial decision tied to it.

And for many people, one such bad choice would be an "irrevocable funeral trust." Estate-planning attorneys and elder-law specialists say that a funeral trust is a good choice for people in very specific circumstances, so some people who have one may actually have made a smart move. But for most people such a trust is a financial killer.

Check out Personal Finance

From real estate to retirement, MarketWatch covers the topics that are vital to your pocketbook. Don't miss these recent winners:

• Perspective, not panic, is needed
• Paid tax preparers mess up
• Using an IRA for realty investing
• Boosts for volunteerism

Get our free PF Daily newsletter



An irrevocable funeral trust -- as sold by FuneralTrusts.com -- is a single-premium life-insurance policy, typically with a death benefit in the range of $10,000 to $15,000 that is designated for covering funeral costs.
It's different from preplanning a burial, however, because that is done in conjunction with a funeral home. A key selling point behind the trusts is headline-grabbing cases where funeral homes have gone out of business; another is that the trust provides flexibility in picking a service provider, so that the family is not locked into using a certain funeral home.
It is similar to that kind of planning, however.
A key issue behind funeral planning is the need for long-term medical care and the desire to shield some assets from nursing homes or Medicaid. Not only is there a carve-out that allows an individual to set aside money for a funeral, but money used for that purpose "beats the clock;" where most assets must be moved out of an individual's name and/or accounts well in advance of needing long-term care, funeral monies can come out on the eve of moving into the nursing home and just prior to needing Medicaid
"The idea behind a funeral trust is to allow a senior citizen to put some money aside so that if they do go into a nursing home, they have something set aside for their funeral, money that is exempt from Medicaid," says Mike Odell, national sales manager for FuneralTrusts.com. "We approach the funeral trust planning as Medicaid planning, and not from an investment standpoint."
Approached that way, estate planners and elder-law attorneys say the funeral trust makes sense, provided it's done at the last possible minute. There's no advantage to executing an irrevocable funeral trust well in advance.
The problems are buried, if you will, in the details.
For starters, the insurance company is the trustee of the trust, instead of someone you know.
"You're turning the money over to an insurance company, and then you will need the money quickly -- because funeral homes can be pretty demanding when it comes to payment -- and you have to wonder if the trustee has an incentive to pay the claim promptly," says Stephen Ziobrowski, an estate-planning attorney at Day Pitney in Boston.
"At the very least, you're creating another step in the dance of getting the money to the funeral home; when the time comes, you'll be rushing around to prove to the insurance company that they must pay the claim now. If they don't, you might have to come up with money to pay for the funeral while you wait for the claim to settle."

Dont know all the details, but Ill keep you up to date. They do have a trust that is what you have explained above, but a new one is coming also.

 

[Newby]

I am wondering if anyone here is planning on attending the 1st National Conference on the Irrevocable Funeral Trust in Wisconsin on October 29th?

I will be attending it, and am looking forward to learn about the new "Family Estate Trust"

For people in the Senior Market who have not looked into this product, it may be something you may want to further look into (depending on your state).

So is anyone going?

Ramiz
Live Transfer Health Lead

Ramiz, did you go to this and what did you think of it?

 

[agentshawn]

I use a company for Funeral Trust. They are a great company. Check out my site to learn about it.

www agentshawn com

 

[theinuranceguy]

Ramiz, did you go to this and what did you think of it?

Ya I ended up going. And to be honest, my mind changed on the plan after I ended up going there. I seem to side with your opinion more than I do with the marketers of the product.

However, they do have a trust that is not sheltered from Medicaid and is subject to the 5yr look back that seems pretty good. Havnt written it, but I have scaled back on the Irrevocable trust and only used it in very unique situations.

 

[Newby]

Ya I ended up going. And to be honest, my mind changed on the plan after I ended up going there. I seem to side with your opinion more than I do with the marketers of the product.

However, they do have a trust that is not sheltered from Medicaid and is subject to the 5yr look back that seems pretty good. Havnt written it, but I have scaled back on the Irrevocable trust and only used it in very unique situations.

I think a lot of the problem is the FMO called funeraltrust.com

A lot of the marketing BS they are doing is very questionable and I thought it was comming from NGL themselves. I was contracted through funeraltrust.com but I never sold the product because it seemed very misleading to the consumer and unethical.

I'm changing my contract and will possibly use the estate planning trust also. I'm not sure if people are looking for that or not.