1030.020.00 Life Insurance, Pre-need (also known as Pre-paid) Burial Contracts, and Designated Burial Funds

1030.020.10.15 Agreements on or After August 28, 2009

IM-61 May 21, 2020; IM-155 October 7, 2019; IM-154 October 7, 2019

Legal reference: Missouri Pre-need Funeral Contract Act and RSMo 436.400-436.525.

Effective August 28, 2009, participants have four options for pre-need burial contracts.  The contract and/or other verification provided must be read closely in order to make a correct determination.  If the contract does not meet one of the criteria listed below and was created on or after August 28, 2009, submit to the Program and Policy Unit for an interpretation of policy.

  1. Joint Account: If the contract provides that all payments are to be deposited in a joint account under the joint names and joint control of the purchaser and seller, then the purchaser may request withdrawal of the funds held in the joint account at any time.  When such request is made the seller must cooperate in making the joint withdrawal, but may keep a fee of up to 15% of the funds that were paid.                                                               
  2. Trust Account with Funeral Home:  If the contract provides that all payments are to be deposited into a trust account by the provider, the purchaser may request to withdraw the funds at any time.  When such a request is made the seller may keep a fee of up to 15% of the funds that were paid.

Both types of accounts listed above can be revocable or irrevocable.  If revocable, 85% of the value will be a countable resource and considered for the CSV exemption.  If irrevocable, the face value or the amount of the policy paid in thus far, will not be a countable resource, but will be considered for the CSV exemption.

  1. Personal Funeral Trust Account (PFT): Each participant can set up an individual PFT account to pay for his/her future burial expenses.  These funds do not have to be connected to a specific funeral service provider, but are restricted to be used for burial or funeral expenses.
    • The PFT documents must be submitted to the Program and Policy Unit using the current process for requesting an interpretation of policy. 
    • Funds up to $9999.99 in an irrevocable PFT account are not a countable asset.
      • The standard trust rules will apply for the amount of the trust above $9999.99.
    • All funds in a revocable PFT account are a countable asset.
    • Funds are restricted to be used only for the burial, funeral, preparation of the body, or other final disposition of the person whose funds were deposited into the account.
    • The trust must include a Medicaid payback provision.
    • The trust balances need to be verified or attested to during the annual review process for the MO HealthNet case. If the trust balance has previously been verified, participant’s attestation of the balance at the annual review is acceptable, so long as the value is not in question and does not cause ineligibility.
    • Placing funds in a PFT is not considered a transfer of assets because the participant is getting fair and valuable consideration in exchange for the investment in the trust.
    • The trustee of the account must be a state or federally chartered financial institution that is authorized to exercise trust powers in the state of Missouri.
  1. Irrevocable pre-need burial contracts that are funded by a life insurance policy. Apply policy regarding December 1973 Eligibility Requirements manual section 1030.020.10.20 Assigning Life Insurance to Fund Pre-need Burial Contracts.

Funds remaining from any of these accounts that were not spent on the participant’s burial will be claimed by Estate Recovery, up to the amount expended for public assistance for the individual.