2311 Burial Contracts (Pre-Paid or Pre-Need) and Burial Space Items | Medicaid

A prepaid (or pre-need) burial contract is an agreement whereby a buyer pays in advance for a burial that the seller agrees to furnish upon death of the buyer or other designated individual. A burial contract is usually with a funeral home and may include coffin, vault, flowers, embalming, cremation, etc. A cemetery contract is with owners of a cemetery and may include opening/closing of the grave, maintenance of the gravesite, mausoleum, headstone, etc. At times a burial contract may include items pertaining to the gravesite.

All burial contracts purchased in Georgia are, by state law revocable. Assume that all other contracts are revocable unless the A/R provides proof to the contrary. Treat any burial contracts that are irrevocable the same as revocable contracts.

A non-itemized contract does not indicate the cost of each item.

Only one burial contract and one cemetery contract designated on a particular individual may be considered for exclusion from resources.

In either case, the face value should be equal to the purchase price of the burial contract at the time of purchase. Any appreciation of the excluded funds after the date of designation may also be excluded. If the life insurance policy has not been irrevocably assigned to the funeral home, then the contract is not considered as paid in full. Notice of the irrevocable assignment must be received.

Burial space items may be part of a burial contract or owned outright. The following are burial space items:

The term burial space item also includes necessary and reasonable improvement for additions to such spaces, including but not limited to the following:

Only the value of burial space items, which are paid in full, may be exempt from resources and the burial exclusion policy. If the A/R and deemor own burial assets in excess of the burial exclusion allowance, the excess is considered as a countable resource to be applied toward the resource limit of the appropriate COA.

Immediate family includes the Medicaid individual’s spouse; minor and adult natural, adopted and stepchildren and their spouses; natural and adoptive parents and their spouses, siblings and their spouses. If the relationship to the A/R is by marriage only, the marriage must be in effect in order for the burial space exclusion to continue to apply. Immediate family does not include members of an ineligible spouse’s family unless they are also within the appropriate degree of relationship(s) to the Medicaid individual.

Exclude up to $1500 of the combined equity value (EV) of all burial contracts and one burial plot per each AU or BG member. Count the EV of any additional plot(s) toward the resource limit. Changes in the burial contract policy are effective July 1, 2005.

However, implement the policy for applications (including the three prior months) and reviews beginning January 1, 2007. Non-FBR A/Rs may exclude up to a total of $10,000 for burial purposes. This includes the FV of life insurance policies 2323 Life Insurance Policies, funds set aside for burial 2312 Burial Funds and the purchase price of burial contracts less paid in full burial space items.

FBR A/Rs may exclude up to a total of $1500 for burial purposes. This includes the FV of life insurance policies 2323 Life Insurance Policies, funds set aside for burial 2312 Burial Funds and the purchase price of burial contracts less paid in full burial space items.

Obtain an original copy of each burial/cemetery contract to verify the following:

The purchase price of a contract is the amount paid for contract less any sales tax.

Count as a resource burial space items owned by an A/R or deemor if they are designated for anyone other than a member of the A/R’s immediate family or they are not designated for use by a specific individual.

Exclude only one burial space item per person that serves the same purpose, such as a casket or an urn.

If the contract is paid in full and includes the cost of burial space items, follow the steps below to determine the current value.

Refer to Appendix F, for the “Burial Exclusion” form 985.

If the contract is not paid in full, follow the steps below to determine the value:

The value of the burial contract may be excluded under the burial exclusion allowance or counted as a resource.

Consult the Field Program Specialist for instructions if the A/R claims that selling or cashing in of a burial contract will cause significant hardship.

If an A/R alleges owning only one of a particular burial space item, or an A/R and spouse allege owning no more than two, assume that the items are designated for the A/R and spouse. Document the allegation in the case record.

If an A/R or A/R and spouse allege owning more than one (or two for the A/R and spouse) of a particular burial space item, obtain a signed statement Form 987 showing the name and relationship of the person for whose burial each item is designated.

Verify the CMV and EV of all non-excluded burial space items using Form 986, found in Appendix F.

Document the case appropriately.

Exclude from resources only the burial plots owned by an ABD A/R or deemor that are designated for immediate family members. Count as a resource those owned for others.

Document the A/R’s statement as to the number of burial plots owned.

Refer to the “Burial Exclusion” form 985 in Appendix F and compute the $1500/$10,000 burial funds exclusion by the value of any of the following assets owned by the A/R and deemor:

If the A/R or deemor owns burial assets in excess of the burial exclusion allowance, determine which assets to exclude. Guidelines for this determination:

If a burial fund or the countable value of a burial contract is included in the burial asset exclusion, the Form 985 must be signed to specifically designate those items for burial.