How to Save Funeral Plans, Burial Spaces/Plots, and Prepaid Burial Contracts from Florida Nursing Home Medicaid

Funeral plans, burial spaces/plots, and prepaid burial contracts are exempt for Florida Medicaid if the funeral plan or burial contract is irrevocable. These contracts need to be with a funeral home or funeral director in order to be excluded.

Typically, when you purchase a prepaid funeral plan or burial contract, the contract is often revocable to a certain extent. Revocable simply means that you can cancel the contract at a specific time and receive a portion of your money back. If you can cancel the contract and receive money back from the contract, the amount you can receive back from the cancellation will be considered a countable asset for Florida Medicaid purposes.

If you do have a prepaid funeral plan or burial contract, the simple fix is to simple go to the funeral home or funeral director, provide them with a copy of the contract that you signed, and ask to make the plan irrevocable. Funeral homes do this all the time, and they will provide you with a simple form that you can sign to make the contract irrevocable. Once you sign the form the amount you paid to the funeral home or funeral director will now become a non-exempt asset for Florida Medicaid purposes.

How much can you exclude for a prepaid funeral plan or burial contract? The great news is that the amount that you can exclude is unlimited. Funerals, cremation, and burials can be very expensive and often cost many thousands of dollars. Even if the prepaid funeral plan you purchase is worth $10,000, as long as it is irrevocable it is exempt for Florida Medicaid purposes.

The policy reason behind this is that the State of Florida would prefer that the Medicaid applicant pay for his or her own burial costs so that the State or other family members are not responsible.

Example: Fred Flinstone purchased the most expensive funeral plan that he could purchase at the local Bedrock funeral home.  The plan cost him $20,000 and it is revocable, meaning that Fred can cancel the policy and receive his money back.

Fred now needs to go to a nursing home and his revocable burial plan for $20,000 makes him ineligible for Medicaid. Fred’s wife, Wilma, then goes to the Bedrock funeral home and makes the $20,000 plan irrevocable.

Result: Fred’s $20,000 deluxe funeral plan is completely exempt for Medicaid purposes now that it is irrevocable.

Burial spaces items that are excluded are caskets, headstones, and the opening and closing costs of the grave. Burial spaces/plots that are excluded are conventional grave sites, crypts, mausoleums, and urns.