A Funeral Trust is a contractual agreement between a client and a provider of funeral or burial services, often entered into directly with a funeral home. This agreement is funded with cash, bonds or life insurance, and may “lock in” costs for future services at an agreed-upon price.

While a revocable Funeral Trust can be changed and canceled by the client at any time, an irrevocable trust cannot be changed or revoked — and a client generally cannot get their money out except to pay for funeral services.

Some important benefits of an irrevocable Funeral Trust:

• Enables a client to pay in advance for expensive items which they (or their family) will have to pay eventually.
• It can help a client qualify for long-term care benefits through Medicaid, if funded with assets that are not considered countable resources by Medicaid.
• Most of these plans are transferable to another funeral home if you decide to switch or the initial business fails.

Funeral expenses that are eligible under an irrevocable Funeral Trust include a wide range of funeral-related products and services, such as: burial plot, caskets, cemetery services and fees, death certificates, dressing and cosmetology, embalming, funeral direction services, funeral home services, headstone, hearse transportation, memorial following the burial, obituary notices, and even transportation for family members (which is an often-overlooked but potentially costly expense).