In the event that you should need 24/7 care, you may find that you need to apply for Medicaid assistance. On average, nursing homes cost $5000-8000 each month to reside there full time. In order to be eligible for Medicaid assistance, applicants need to have less than $2000 worth of assets. Homes and a vehicle are allowed but all other assets (cash, insurance policies with a cash value, investments, etc.) must be spent down until the qualifying level is reached.
Pre-arrangements and pre-payments toward a funeral are considered an exempt asset that won’t affect Medicaid eligibility. These funds are also protected from the nursing home. In order for your pre-paid funeral arrangements to be exempt, you must set up an irrevocable funeral contract. This means that you cannot change or cancel it once it has been signed.