Funeral Expenses 450-01-20-05-05

(Revised 1/15/2011 ML #3253)

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Funeral expenses may be paid from funds set aside for that purpose under Medicaid or SSI rules.

1. If funds have been set aside for funeral expenses, a claim [by a relative or funeral home] may not be made for funeral expenses against the estate except to the extent the funds set aside for the funeral total less than $6,000 [principal].
2. If funds have not been set aside for funeral expenses, up to $3,000 may be used for that purpose from the estate.
3. If an amount less than $6,000 (principal) has been set aside, not including interest, estate assets may be used, provided that no more than a total of $6,000 may be paid from the funeral set-aside and estate assets in combination, and no more than a total of $3,000 in estate assets may be used for funeral expenses.

PLEASE REFER TO THE EXAMPLES IN THIS SECTION.

Costs of flowers, grave markers, headstones, gifts to clergy or soloists, and any other similar funeral expenses, may be paid from either a funeral set-aside or from the decedent’s estate, provided the established total cost limits are not exceeded. Memorial monies may also be used for funeral expenses as they are not part of the estate.

Term insurance is an exempt asset excluded for Medicaid eligibility purposes, and is not subject to estate recovery. Because it is excluded for eligibility purposes, it is an asset that is not available for designation as funeral expenses. Inquires should be directed to the state estate recovery staff if the beneficiary named is the estate or the department.

Final payments for telephone, utilities, rent, etc., may not be paid from non-burial accounts after date of death. Unpaid recipient liability and other medical bills and unpaid guardianship fees may not be paid from non-funeral funds after date of death unless those bills are for expenses of last illness, and Medicaid did not pay for any expenses of last illness. State staff determine what is a valid claim for expenses of last illness.

Examples:

1. Burial account $6,000 principal, $1,500 interest – all $7,500 can be paid toward the funeral with the estate paying nothing. If the funeral bill was only for $5,000, then an affidavit for collection should be sent to the funeral home collecting $2,500 and the estate would pay nothing.
2. Burial account $4,000 principal, $2,500 interest – all $6,500 can be paid toward the funeral with the estate paying up to $2,000. If the funeral bill was only for $7,000, the estate would only pay $500. If the funeral bill was only for $5,000, then an affidavit for collection should be sent to the funeral home collecting $1,500 and the estate would pay nothing.
3. If the recipient had no burial account, then the estate would pay up to $3,000.
4. Burial account principal $6,000, no interest, and no money from the estate can be used. If the funeral bill was only for $5,000, then an affidavit for collection should be sent to the funeral home collecting $1,000 and the estate would pay nothing.
5. Burial account of $6,000 principal, $1,000 interest, $2,500 of MA assets designated for burial – all $9,500 can be used toward the burial with the estate paying nothing. If the funeral bill was only for $5,000, then an affidavit for collection should be sent to the funeral home collecting $4,500 and the estate would pay nothing.
6. Burial account of $3,000 principal, $1,000 interest, and $2,500 of MA assets designated for burial – all $6,500 can be used toward the burial with an additional $500 from the estate’s assets. If the funeral bill was only for $5,000, then an affidavit for collection should be sent to the funeral home collecting $1,500 and the estate would pay nothing.