Medicaid and Planning Ahead
What they
cannot count
Medicaid pays for nursing home care only after a person has spent down nearly all their savings. But it does not count everything. Cemetery property is left out of the total entirely, with no limit and nothing extra to sign. The money is not thrown away to hit a number; it buys what the family had to buy anyway, at today’s prices.
This is not a loophole
Nothing here is a trick or a grey area. These rules were written on purpose: the state would rather a funeral be paid for in advance than have it become somebody else’s problem later.
Section 1
What Spend-Down Means
And why the funeral home keeps coming up in the conversation
Nursing home care costs more than most families can pay. Medicaid will help, but only after a person has used up nearly all of their own savings first. There is a limit on what they are allowed to keep, and it is low. Getting down to that limit is what people mean by a spend-down.
Here is what gets missed. Medicaid does not count everything a person owns. Certain things are left out of the total entirely, no matter what they cost. Cemetery property is one of them. A funeral plan can be another.
So this is not money thrown away to hit a number. It buys something the family was going to have to pay for anyway, at today's prices instead of tomorrow's, and it does not push anyone over the limit.
This is not a loophole
Nothing here is a trick and nothing here is a grey area. These rules were written on purpose. The state would rather a person's funeral be paid for in advance than have it become somebody else's problem later. Using them is exactly what they are there for.
Section 2
Money They Cannot Count Against You
This is the good news, so let us be clear about it
When Medicaid adds up what a person owns, cemetery property is left out of the total. Every dollar of it. There is no limit on how much, and nothing extra to sign.
Here is what that means in real life. Say someone is a few thousand dollars over the limit and has been told to spend it down. If they put that money into cemetery property, it comes straight off the total Medicaid counts, and the family now owns a grave, a vault, and a marker they were always going to have to buy.Say someone is a few thousand dollars over the limit. Put that money into cemetery property and it comes straight off the total Medicaid counts, and the family owns a grave, a vault and a marker they were always going to have to buy.
The money is not gone. It has been turned into something the family needed anyway, bought at today’s prices rather than at tomorrow’s. That is why this is worth understanding before the money goes anywhere else.
The list of what counts as cemetery property is also longer than most people expect.The list is longer than most people expect.
- The grave itselfA conventional gravesite
- Crypts, niches, and mausoleumsWhether the choice is burial or cremation
- Urns and casketsAnd other containers customarily used for remains
- Vaults and outer burial containersThe container the casket or urn sits inside
- Headstones, markers, and plaquesThe memorial and its lettering
- Opening and closing of the graveThe work of preparing and closing the space
- Care and upkeep of the graveThis covers the endowment care fund, the charge Washington requires on every cemetery purchase to keep the grounds maintainedThe endowment care fund counts here too
- Property you are still making payments onIt does not have to be paid offIt does not have to be paid off
Put that list next to a real cemetery quote and it covers nearly every line on it. The space, the vault, the marker, the interment, and the care fund are all left out of the total.Put that list beside a real cemetery quote and it covers nearly every line on it.
Who you can plan for
Here is the part almost nobody knows. This is not limited to the person going into care. They can buy cemetery property for a spouse, parents, children and stepchildren, siblings and stepsiblings, and the husband or wife of any of them, and it is all still left out of the total. Nobody has to depend on you or live with you.
What that means in practice
In a big family that adds up fast. It is also the thing families most often find out too late, after the money has already gone somewhere it did not need to go.
Section 3
Who You Can Plan For
The part that surprises everybody
Here is the part almost nobody knows. This is not limited to the person going into care. They can buy cemetery property for close family too, and it is still left out of the total. The rules are generous about who close family means.
Your spouse
Including a surviving spouse.
Your parents
Parents and adoptive parents.
Your children
Minor and adult children, including adopted children and stepchildren.
Your siblings
Including adoptive siblings and stepsiblings.
And their spouses
The husband or wife of any of the people above.
No strings attached
They do not have to depend on you for money and they do not have to live with you. The rule says so in plain terms.
What that means in practice
Someone doing a spend-down can buy cemetery property, and everything that goes with it, for a husband or wife, both parents, every child and stepchild, every brother and sister, and each of their spouses. All of it is protected.
In a big family that adds up fast. It is also the thing families most often find out too late, after the money has already gone somewhere it did not need to go.
Locking the money in
Cemetery property is the easy part; it is covered already. The funeral itself is where you will hear the word irrevocable. It means one thing: you give up the right to change your mind and take the money back. That one decision changes everything. Keep the right to take it back and only $1,500 is protected, which for most families barely helps. Give up that right and the whole amount is protected, with no cap. The only limit is that it has to be a reasonable price for a funeral, which is why we write an itemized list of exactly what the money is buying.
It is a choice, not a requirement
Planning your funeral in advance does not mean locking the money in. It is a separate decision on a separate signature line, and most families who plan with us never sign it.
Section 4
Locking the Money In
What the word irrevocable actually means
Cemetery property is the easy part. It is covered already and there is nothing more to do. The funeral itself works differently, and this is where you will hear the word irrevocable.Cemetery property is the easy part; it is covered already. The funeral itself works differently, and this is where you will hear the word irrevocable. It means one thing: you give up the right to change your mind and take the money back.
It sounds complicated. It is not. It means one thing: you give up the right to change your mind and take the money back.
That one decision changes everything about how the money is treated.
Keep the right to take it back, and only $1,500 of it is protected. Everything above that still counts against the limit. For most families that barely helps at all.
Give up the right to take it back, and the whole amount is protected. There is no cap on it.
There is one sensible limit. The amount has to be a reasonable price for a funeral. You cannot put a life savings into a funeral plan and call it a funeral. That is why we write out an itemized list of exactly what the money is buying, so anyone who asks can see it is a real funeral at a real price.One sensible limit: the amount has to be a reasonable price for a funeral. That is why we write an itemized list of exactly what the money is buying.
It is a choice, not a requirement
Planning your funeral in advance does not mean locking the money in. That is a separate decision on a separate signature line, and it is meant for people applying for help or already receiving it. Most families who plan with us never sign it and never need to.
What you give up
Locking the money in is permanent. You cannot cancel it and get a refund, and with an insurance plan you give up the right to cash it in or borrow against it. Monthly payments carry on. You are not locked to us, though: what is locked is the money, not who takes care of you. Anything left over goes to the estate, which Washington may claim against to recover care costs, so ask your lawyer about that one.
Timing matters more than people expect
Two ways we can fund a plan, and they do not lock in at the same speed. One is locked the moment you sign; the insurance one usually is not locked until ninety days after the policy is issued.
If a Medicaid application is already underway, tell me in the first five minutes. Ninety days can be the difference between a plan that helps and one that arrives too late. If I know, we use the other one.
Section 5
What You Give Up
Said plainly, because there is no undoing it
We would rather you hear this from us now than find out later. Locking the money in is permanent. There is no changing your mind next year.
The money is not yours to take back
You cannot cancel it and get a refund. With an insurance plan you also give up the right to cash it in or borrow against it. Not for a car repair, not for a medical bill, not for anything.
Any payments carry on
If you are paying monthly, those payments continue. Locking the money in does not mean the plan is paid off. If you paid in full up front, there is nothing further to pay.
You are not locked to us
You can still switch funeral homes later if you want to. What is locked in is the money, not who takes care of you.
Money left over may not reach your family
Anything left after the funeral is paid for goes to the estate. But Washington law lets the state make a claim against that estate to recover what it spent on long-term care. Ask your lawyer about this one specifically.
Timing matters more than people expect
There are two ways we can fund a plan, and they do not lock in at the same speed. One is locked the moment you sign. The other, the insurance one, usually is not locked until ninety days after the policy is issued.
If a Medicaid application is already underway, tell us in the first five minutes. Ninety days can be the difference between a plan that helps and one that arrives too late. If we know, we use the other one.
If you already have a plan
An existing plan can usually be changed over and locked in. One thing before you start making calls: the conversion has to go through the funeral home that wrote it. If that was us, bring the paperwork in. If not, they are the ones to call, and I would rather tell you that than waste your afternoon.
Section 6
If You Already Have a Plan
It is very likely not too late
Most people who need this did not plan last week. They planned years ago, when everyone was well, and never imagined it would matter for anything but a funeral.
Good news: an existing plan can usually be changed over and locked in. One thing to know before you start making calls.
Conversion goes through the funeral home that wrote it
Whichever funeral home you originally planned with is the one that has to make the change. If that was us, bring in the paperwork and we will take care of it.
If you planned somewhere else, they are the ones to call, and we would rather tell you that than waste your afternoon. If you are not sure who has it, bring whatever paperwork you can find and we will help you figure out where it is.
Who to actually ask
We arrange funerals and cemetery property. We are not lawyers and we do not decide whether anyone qualifies for Medicaid. Nobody at a funeral home can, so be wary of anyone who tells you otherwise. What we can do is tell you what things cost, set the arrangements up properly, and give you paperwork clear enough for whoever is advising you to use.
- An elder law attorneyThe right person to plan the whole thing: the house, the savings, the timing
- The Health Care Authority or DSHSThey run these rules and decide who qualifies. Any final answer comes from them
- A hospice or facility social workerUsually knows which local lawyers are worth calling
Section 7
Who to Actually Ask
And where our part of this stops
We arrange funerals and cemetery property. We are not lawyers, and we do not decide whether anyone qualifies for Medicaid. Nobody at a funeral home can. Be wary of anyone who tells you otherwise.
What we can do is tell you what things cost, set the arrangements up properly, and give you paperwork clear enough for whoever is advising you to use. That genuinely helps. It is also where we stop.
An elder law attorney
The right person to plan the whole thing. They look at the house, the savings, and the timing, and tell you where funeral and cemetery planning fits in. Worth every penny at this stage.
The Health Care Authority or DSHS
The state offices that run these rules and decide who qualifies. Any final answer comes from them, not from us.
A hospice or facility social worker
Often the most useful person in the building. They do this every week and usually know which local lawyers are worth calling.
If you are already working with any of them, give us their name and we will send paperwork straight over. You have enough to carry this month without being the messenger too.
Section 8One thing families ask
Common Questions
What families ask us most
Will buying cemetery property make us ineligible?
No, the opposite. You are buying something real at a fair price, not giving money away, and the rules leave it out of the total. This is a normal, well-worn part of a spend-down. Your lawyer or caseworker should confirm it for your situation, but nobody will be surprised by it.
Do we have to lock everything in?
No. Cemetery property is protected either way, with nothing signed and nothing locked. Locking money in only applies to the funeral side, it is optional, and it is meant for people applying for help or already getting it. Plenty of families never need it.
How much can we set aside for the funeral?
If the money is locked in, Washington sets no fixed dollar limit. It just has to be a sensible amount for an actual funeral. That is why we write out an itemized list showing exactly what is included, so the number speaks for itself.
What happens to any money left over?
It goes to the estate. Be careful with this one though. Washington law allows the state to make a claim against an estate to recover long-term care costs it paid, so leftover money may not simply pass to the family. It is also a good argument for not overfunding a plan in the first place. Ask your elder law attorney how it applies to you.
My mother is already in a nursing home. Is it too late?
Usually not. Plans can still be made and existing ones locked in at that stage. We come to you, whether that is a nursing home, assisted living, hospice, or the kitchen table. Timing is the one thing to watch, so tell us any application date right at the start.
Can we still choose what we actually want?
Yes. None of this decides the funeral for you. You pick the service, the casket or urn, the part of the cemetery, and the marker, exactly like anyone else. These rules are about how the money is treated, not about what you are allowed to have.
Do you charge for this conversation?
No. Sitting down costs nothing, an itemized estimate costs nothing, and neither one obligates you to anything. If it turns out you need a lawyer more than you need us, we will say so.
Come and talk it through
Bring whatever paperwork you have, including any plan made elsewhere. We can meet here, at home, or wherever your family member is.
Schedule a conversation Browse all guidesOr reach Martice Morrison directly at 206-277-5417 or mmorrison@bonneywatson.com
Come and talk it through
Bring whatever paperwork you have, including any plan made somewhere else. An existing plan can usually be converted and locked in, though that has to go through the funeral home that wrote it. We can meet here, at home, or wherever your family member is. Sitting down costs nothing and obligates you to nothing, and if it turns out you need a lawyer more than you need me, I will say so.
Martice Morrison · (206) 445-9794 · mmorrison@bonneywatson.com
This guide explains how the rules generally work. It is not legal or financial advice. Bonney Watson does not decide who qualifies for Medicaid and does not prepare or review applications. Rules change and every family is different, so please check anything here with an elder law attorney or with the Washington State Health Care Authority before you act on it.
