Here the individual irrevocably contracts with the funeral director or cemetery and
prepays for the goods and services. In New Jersey, the funeral director or cemetery
must hold any moneys paid for future funeral services as trust funds in a separate
FDIC insured bank account. A prepaid funeral trust must contain, in a conspicuous
manner, the following statement:
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New Jersey law requires this agreement to be irrevocable for applicants or recipients
of public assistance programs (such as the Medicaid, Supplemental Security Income
(SSI), Work First New Jersey and Work First New Jersey General Public Assistance programs,
or any successor program thereof) and for the State of New Jersey to be named as beneficiary
of any irrevocable funeral trust or irrevocably assigned newly issued funeral insurance
policy purchased or created for the provision and payment of funeral and burial goods
and services. Any moneys remaining after the provision of funeral goods and services
shall be paid over to the State as required by law.
If the intended funeral recipient is either in receipt of SSI or an applicant for
SSI within six months of the date the agreement is signed and the agreement provides
that the trust is irrevocable during the individual's lifetime, it is not a countable
resource. If, however, the intended funeral recipient does not become an applicant
for or a recipient of SSI within six months of signing the agreement it reverts to
a revocable trust. In the latter situation, develop the value of the resource per
SI 01130.420B.
NOTE: The face value of the burial funds portion of the contract, if any, offsets the $1,500
burial funds exclusion available to an individual. The face value of the burial space
portion of the contract, if any, does not offset the $1,500 burial funds exclusion
(SI 01130.420B.2).