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The counted value of burial funds depends on the type of burial fund and whether it is revocable or irrevocable.
See the table below for details of how burial funds are treated:
Burial Fund… |
Treatment… |
Irrevocable Burial Arrangement |
Resources irrevocably assigned to fund a pre-need funeral arrangement are excluded when the customer does not have access to the funds. NOTE The customer may still have access to funds in a burial arrangement even when he or she is no longer the listed owner or holder of the contract or certificate. See Irrevocable Burial Contract for an example. When the customer has access to the funds in the irrevocable funeral arrangement use the policy for revocable burial arrangements to determine how to count the resource. |
Revocable Burial Arrangement |
When a burial arrangement can be revoked or sold, the following apply: · Consider any amounts clearly identified for the purchase of burial plot items using the policy in MA705E; · Any remaining amount is counted based on the amount payable to the owner if revoked, or the current market value when the contract is not revocable but can be sold. Exception: When the burial arrangement cannot be revoked or sold without significant hardship to the customer, it is treated like an irrevocable burial fund and excluded. An example of a significant hardship would be if the customer has to move out of state for the contract to be revoked or liquidated. |
If the customer does not have an irrevocable burial arrangement, up to $1,500 that is set aside to pay for the cost of a funeral is excluded as a resource. The customer and the customer’s spouse are each eligible for their own $1,500 burial fund exclusion, regardless of which spouse owns the funds. To qualify for the exclusion, these funds must be designated for burial expenses and kept separate from other non-burial related resources.
Designation may be done by the title of an account or by written declaration. Written declarations should be on the Burial Fund Designation (DE-157) form, which has a penalty clause for providing false information. A written declaration must show:
· The value and owner of the resources;
· How the resources are being held (burial contract, bank account, etc.);
· For whose burial the resources are set aside; and
· the date the owner first considered the funds set aside for the burial of the person named.
The burial fund exclusion is applied to the value of the designated fund, including interest or appreciation, the month the exclusion begins. The exclusion begins the latest of the following months:
· The month the funds were first considered to have been set aside;
· The application month; or
· The month funds designated for burial are separated from other funds not related to burial.
See Examples Declaratively Designated Burial Funds.
Once a fund is separated and designated as set aside for burial, it remains a burial fund until one of the following occurs:
· The customer's ALTCS eligibility ends;
NOTE When the customer has a temporary change in circumstances that lasts three months or less, eligibility may be suspended instead of ended. In this case, the burial fund and exclusion remain in place.
· The customer purchases an irrevocable burial contract;
· The customer uses the funds for another purpose; or
· The burial funds are mixed with other resources not intended for burial.
If a fund is no longer a burial fund, any part of it that was excluded under burial fund policy is now counted.
Once the burial fund exclusion is determined, any interest earned on the designated burial funds is also excluded if not withdrawn. This applies even when only a portion of the burial fund is excluded.
When the customer loses eligibility and reapplies later, the burial fund exclusion is applied as if it were being applied for the first time, and a new designation must be provided. The current value of the fund is used. Interest earned or appreciation since the prior time the exclusion was applied are no longer excluded.
See Examples Interest Earned on Burial Funds.
If the total amount of the designated burial funds at the time the Burial Fund Exclusion was determined is less than $1,500, the customer may add to the designated burial fund up the the maximum of $1,500. See Example - Adding to a Designated Burial Fund.
Term |
Definition |
Burial funds |
Burial contracts, burial insurance, burial trusts, other burial arrangements such as cash, financial accounts, or other financial instruments that are clearly designated for burial expenses and separated from any resources not related to burial. |
Burial Insurance |
An insurance policy with terms that do not allow the use of the proceeds for anything other than payment of the insured's burial expenses. NOTE If the policy has a cash surrender value to which the owner has access, it is considered life insurance and not burial insurance. |
Declarative Designation |
A statement signed under the penalty clause regarding fraud in which the person who owns the resource states the purpose for which the resource was set aside and the date it was set aside. The Burial Fund Designation (DE-157) form is used for this purpose. |
Funeral Arrangement Expenses |
Funeral arrangement expenses are related to preparing the body for burial and services before burial. This includes transporting the body, embalming, cremation, funeral or memorial services, flowers, clothing, the services of a funeral director and staff, benefit of clergy. NOTE These items are different than burial plot items, which are used for the deceased's remains. |
Irrevocable Burial Arrangements |
A burial fund with terms stating that no portion of the funds may be obtained under any circumstances except for burial expenses. NOTE When a funeral provider has been irrevocably named the beneficiary of an insurance policy to fund a pre-need burial contract, the policy is treated as an irrevocable burial fund if the policy's owner has no access to the policy's CSV and cannot cancel the policy. |
Irrevocable Burial Trust |
An irrevocable Burial Trust is a trust that does not fund a burial plan at a specific funeral home. |
Pre-need Burial Contract |
An agreement whereby the buyer pays in advance for funeral goods, services, and burial plot items that the seller agrees to furnish upon the death of the buyer or other designated individual. |
Revocable Burial Arrangement |
A burial fund that may be sold and some or all of the value of the contract can be used for non-burial expenses. |
Contract or Trust Terms:
Proof of burial funds and burial arrangements include Burial Contract, Trust or Arrangement papers when they contain the following information:
· The name of the contract owner or trust beneficiary;
· Date of the contract, trust or arrangement;
· Terms of the contract, including whether or not it is it is revocable;
· Name and address of the contractor or trustee; and
· Value of the contract or trust.
Contract Value:
When there is an indication that the customer owes money on the contract or arrangement proof of the outstanding balance and payments includes:
· Billing statements;
· Written statement from contract issuer;
· Canceled checks for proof of payments;
· Collateral contact with the contract issuer.
Irrevocable Assignment of Insurance Policy:
When the burial arrangement is funded by the irrevocable assignment of the ownership of an insurance policy, proof needed includes:
· The burial contract;
· The insurance policy whose proceeds pay for the burial contract; and
· A document legally obligating the insurance policy as payment for the services specified in the burial contract.
NOTE The burial contract itself may contain a clause legally obligating the insurance policy as payment for the services.
Declarative Designation of Burial Funds:
The statement on the Burial Fund Designation (DE-157) form must contain all of the following:
· The value and owner of the resource set aside for burial;
· For whose burial the resources are set aside;
· The form in which the resource is held (for example, life insurance policy, bank account, stocks); and
· The date on which the person considered the funds set aside for burial.
NOTE The person’s statement of the date he or she first considered the funds set aside for burial is accepted (even if it is before the application month) unless there is evidence that the funds were used and replaced after that date.
Program |
Legal Authority |
ALTCS |
42 USC 1382b(a)(2)(B) 42 USC 1382b(d) 20 CFR 416.1231 |