FAQ about Pre Need Arrangements

Commonly asked questions regarding preneed arrangements for applicants or recipients of SSI/Medicaid.

Can a Medicaid applicant apply life insurance towards an irrevocable funeral trust?

No. Life insurance cannot be used in an irrevocable trust.

Which items are to be excluded from the burial trust?

An applicant or recipient of Medicaid/SSI may prearrange reasonable and common funeral merchandise and service expenses. Airline tickets, luncheons, charitable donations and cash gifts are not considered reasonable and common funeral expenses. For an individual opening a revocable account, who is not an applicant or recipient of Medicaid/SSI, all funeral prearrangements may be fully prefunded.

Which county Social Services Department would receive the overage in an irrevocable trust?

The county in which the Medicaid applicant or recipient resided (most likely the county in which they applied for assistance).

Must I send the overage of existing revocable contracts held by Medicaid recipients to the county Social Services Department?

No. The overage to existing revocable contracts of Medicaid recipients should be returned to the Purchaser or to their estate.

Who may authorize a transfer of funds to another funeral home before death occurs?

The Purchaser or their legal representative must authorize a transfer of the irrevocable trust to another funeral home.

Can I create an irrevocable trust if the person is not yet an SSI or Medicaid applicant?

No. Only SSI/Medicaid applicants/recipients may set up irrevocable preneed trusts in New York State.

Can I create an irrevocable trust if the person is not yet an SSI or Medicaid applicant?

Yes, but they must sign a new irrevocable preneed agreement.

Does the law affect pre-existing contracts of Medicaid recipients?

No. If a consumer had both a pre-existing agreement and was receiving Medicaid benefits prior to January 1, 1997, their account may remain revocable, and must still be recertified on an annual basis by County Social Services personnel.

Can additional funds be added to an irrevocable trust?


Can irrevocable preneed agreements be modified at time of need?

Some funeral arrangements may be modified at the time of need, however, no additions or upgrades from the originally selected merchandise and services can be made. Any remaining funds in an irrevocable account must be returned to the Social Services Department in the county where the beneficiary resided and was receiving assistance.

Can we still use the personal needs account to fund the burial trust?

No. The funeral director should not be involved in the use of the Personal Needs Account. A Purchaser of an irrevocable burial trust may still maintain the maximum allowable Medicaid eligibility personal resource level, in addition to the irrevocable trust. That level is currently $3,550 per individual or $5,150 per couple.

Are there disclosures that must be printed on a funeral firm’s advertising materials regarding prearrangements?

Yes. Any promotional material printed must contain language disclosing the irrevocable nature of burial trusts established for individuals receiving or applying for supplemental security income or Medicaid assistance.