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Chapter: 1600 Assets Program: MSSI, SFP 19

1640.0511.02 Value of the Prepaid Burial Contract (MSSI, SFP) Unless the contract meets a condition for exclusion, the amount the individual would receive upon revoking or liquidating the contract is included as an asset. This amount is often different from the face value of the contract. Guidelines for determining the amount to be received are usually set by state law and differ from contract to contract.

The contract must be examined to determine the amount to be received from liquidating or revoking the contract. If the contract is unclear, the individual or eligibility specialist must contact the funeral director to determine the amount.

The value of prepaid burial contracts liquidated by means other than revocation such as sale or transfer is the amount the individual would receive if the contract was sold on the open market.

The individual can rebut the amount with appropriate verification and documents. For example, the State Funeral Directors Association or a local funeral director may provide information showing that sellers of prepaid burial contracts can only expect to receive a percentage of the face value, or the individual may provide proof that only a certain amount was offered or that the contract was advertised for sale and no offers were received. 1640.0512 Irrevocable Burial Trusts (MSSI, SFP) If the irrevocable burial trust is created in connection with a funeral home or funeral director, it is treated like an irrevocable prepaid burial contract. As long as it is irrevocable, the trust is not considered an asset to the individual.

If the irrevocable burial trust is not created in connection with a funeral home or funeral director, it is considered a transfer of assets. Regular burial exclusion policy is applicable to the uncompensated value of the burial trust fund. Up to $2,500 of the trust can be excluded as a burial asset. The remaining uncompensated value would count as an asset to the individual according to policies in Section 1640.0600. 1640.0513 Verification of Burial Contracts or Trust (MSSI, SFP) A photocopy of the burial contract or trust should be obtained to document the value of the contract and whether or not it can be revoked. The case record must explain how the determination of revocability and value were made. 1640.0514 Burial Exclusion Policy (MSSI, SFP) An individual and the individual's spouse may set aside funds of up to $2,500 each for burial expenses. These funds are excluded as assets as long as the individual states they are set aside for burial. This is true even if the case has been closed as long as the funds continue to be designated for burial. The funds must be separately identifiable (not commingled with other funds that are not set aside for burial) unless the asset cannot be separated or it is unreasonable to require it. Accept the individual’s verbal statement of all the following:

1. the amount of funds set aside, 2. for whose burial the funds are set aside, and 3. the form in which the funds are held.

The individual and the individual's spouse must be given the opportunity to designate funds for burial at the time of application and at review if the maximum amount is not already designated. These funds may be excluded regardless of whether the exclusion is needed to allow eligibility. Accept the individual statement that assets are intended for burial.

The $2,500 limit is not reduced by the value of excluded life insurance policies or irrevocable burial contract.