Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability

2.3.3.2.7.11.2 Burial Fund Exclusion (Archive)

Two separate and distinct exclusions apply to assets set aside for burial expenses. All assets set aside for burial expenses must be evaluated to determine if they may be excluded under one of the exclusions. This section discusses the Burial Fund Exclusion (BFE). The Burial Space Exclusion (BSE) was discussed in the previous section.

The BFE allows a person to exclude up to $1,500 of assets for burial services. Burial services include preparing the body for burial and services that are not performed at the burial site. These assets must be clearly designated for the person or their spouse’s burial, cremation, or other burial-related services; they cannot be commingled with other assets not intended for burial. This exclusion applies only if the funds set aside for burial expenses are kept separate from all other assets not intended for burial.

Assets Held for Family Members

People can exclude assets under the BFE for themselves and the following family members:

• Spouse

  • This includes the community spouse of a person who resides in a long-term care facility (LTCF) or receives Elderly Waiver (EW) services.

  • The spouse does not have to be eligible for Minnesota Health Care Programs (MHCP).

• Dependent children who:

  • are MHCP enrollees, and

  • live with the person or the person’s spouse.

Order of Assets Applied to the BFE

Each person’s $1,500 exclusion is reduced in the following order:

1. The face value (FV) of any life insurance policy on the person (or spouse) if such policy is excluded under the life insurance exclusion

2. Any amount held in an irrevocable trust, an irrevocable burial contract, burial insurance, or other irrevocable arrangement for the person’s (or spouse’s) burial expenses, in the order purchased, except to the extent that it represents excluded burial spaces. See Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability (MA-ABD) Burial Space Exclusion for more information.

   • Burial insurance is considered an irrevocable arrangement whose FV reduces the $1,500 BFE by the policy’s value. However, burial insurance is not counted as an asset even if it is not applied to the BFE.

3. Liquid assets, up to $1,500, may be designated for any remaining balance of the BFE. This category includes such liquid assets as:

   • Cash and bank accounts

   • Financial instruments with a cash value, such as stocks, bonds and certificates of deposit

   • CSV of insurance policies when the total FV exceeds $1,500

   • Revocable burial contracts

   • Installment sales contracts for burial space items (BSI)

     • If the person cannot distinguish BSIs from burial services in the contract:

       • All expenses are categorized as services and none as BSIs.

       • The person may ask the funeral provider to amend the contract, distinguishing burial services from BSIs.

   • The contract amount allocated to purchases that cannot be categorized as either a burial service or a BSI, such as certified copies of the death certificate or a meal prior to the burial service.

Changes in Burial Exclusion Amounts

Once the amount of designated burial funds equals $1,500, the only additions to that amount that can be excluded under the BFE are appreciation and/or interest. Interest earned on excluded burial funds and appreciation in the value of excluded burial arrangements are excluded as income and assets if left to accumulate and become part of the burial fund.

Until $1,500 in burial funds has been designated, additional amounts can be excluded under the BFE if the person designates them for burial expenses. Interest on excluded burial funds is not included in determining if the $1,500 maximum has been reached.

Legal Citations

Minnesota Statutes, subsection 256B.056, subdivision 1a

Minnesota Statutes, subsection 256B.056, subdivision 3d

Minnesota Statutes, subsection 256B.056, subdivision 3c(a)(4)

Published:  June 1, 2016

Archived:  September 1, 2016