Medicaid Policy
Medicaid Policy
No Previous Policy
A burial trust is irrevocable if the individual who established the trust or someone acting for the individual cannot change or end the trust during the life of the individual.
Do not count the value of an irrevocable burial trust in the eligibility determination. The assets in an irrevocable burial trust are not available for the individual’s use.
Do not include in the value of the irrevocable burial trust the value of any fully paid burial spaces (591) the individual placed in the trust. These would be evidenced by a deed for spaces, bill of sale, or a fully-paid contract for burial spaces that have been transferred to the trust.
If the individual has an irrevocable burial trust, do not use the maximum amount of the burial fund exclusion to exclude burial funds. An irrevocable burial trust will reduce the burial funds exclusion. Use the rules in 592 to determine the available amount of the burial fund exclusion that you can use to exclude burial funds.
Do not exclude part of the trust assets as fully paid burial spaces (591) if the trust just has a statement that the trust will pay for burial spaces in the future. Such a statement does not constitute a purchase of fully paid burial spaces.
Bank Accounts or Time Certificates
When a bank has special, written provisions attached to the individual’s account or time certificate that allows it to be paid only to a specific funeral provider upon the individual's death, consider the arrangement to be an irrevocable burial trust. Apply the rules in #1 above.
If the individual used the individual’s bank account or time certificate with these special provisions to fund a pre-need funeral contract, apply the rules in 594. In this case, the individual would have signed a contract with the funeral provider showing that the bank account or time certificate is being used to pay the provider and specifying what the individual purchased.
The arrangement is not an irrevocable burial trust if the special provisions only state that the account or time certificate is payable upon the death of the individual, and the individual does not have a trust document or other written provisions that restrict the payment to a specific funeral provider. It isn't a burial trust if there is not a written provision that states it can only be used for the individual's burial and funeral expenses.
Value of $7000 or less in an irrevocable burial trust
Do not apply a transfer of asset penalty as defined in section 575 toward the value of $7000 or less held in the burial trust. The value of $7000 or less in an irrevocable burial trust is exempt from the trust rules in 512-2 and from the transfer of asset rules in 575.
Value greater than $7000 in an irrevocable burial trust
Apply the transfer of asset rules in 575 to decide if a transfer penalty applies to the value of the irrevocable burial trust that is greater than $7000.