SI CHI01130.421 (MN) Minnesota Prepaid Burial Contracts

Minnesota Statue 149A.97 allows burial contract funds to be held in trust and made irrevocable:

“If the purchaser chooses to limit the revocability of the trust funds, the limitation must be declared in the trust instrument and must be limited to an amount equivalent to the allowable supplemental security income asset exclusion used for determining eligibility for public assistance at the time the trust is created.”

A. Limits of irrevocability

  1. An individual/couple may establish an irrevocable burial trust up to the SSI regulatory resource limits (currently $2000/$3000).

  2. For couples' cases, any division of burial trust funds is acceptable; e.g., one member may have a $2500 burial contract, the other a $500 burial contract, etc. However, if the member of the couple owning the $2500 burial contract becomes an individual, the case must be sent to ARC-MOS, CRSI/SSI, for referral to the Regional Attorney. The specific facts of the case must be reviewed to accurately determine countable resources while adhering to state law.

B. Irrevocability of interest

Interest earned on the irrevocable burial trust is neither income nor resources, as long as it is left to accumulate (SI 00830.501).

C. Effect on burial funds exclusion

The $1500 burial funds exclusion is reduced by any amount held in an irrevocable burial trust fund.

D. Irrevocable trusts established on or after August 1, 2000

Minnesota law now requires that pre-need funeral agreements with irrevocable trusts, established on or after August 1, 2000, contain the following statement, in bold-faced type and a minimum size of ten points:

    

"IRREVOCABLE TRUST:

A trust created to hold pre-need arrangement funds is revocable in its entirety unless specifically limited by the purchaser. The purchaser has chosen to create an irrevocable trust in the amount of $ (insert the dollar amount of the purchaser's irrevocable trust). The revocable portion of this trust fund is limited to that amount that exceeds the allowable supplemental security income asset exclusion used for determining eligibility for public assistance at the time the trust is created. The principal and accrued interest may not be withdrawn from the trust prior to the beneficiary's death, except to the extent that the trust funds exceed the irrevocable trust limitation. At the time of the beneficiary's death, the funds shall be distributed in their entirety, principal plus accrued interest, with no fees retained by the trustees as administrative fees. The funds shall be distributed for the payment of the at-need funeral goods, funeral services, burial site goods, or burial site services selected, with any excess funds distributed to the beneficiary's estate. At any time prior to or at the time of the beneficiary's death, the purchaser may transfer the pre-need arrangements and trust funds for use in the payment of funeral goods, funeral services, burial site goods, or burial site services. The purchaser may not be charged with any fee in connection with the transfer of a pre-need arrangement and trust funds."


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0501130421CHI
SI CHI01130.421 - (MN) Minnesota Prepaid Burial Contracts - 03/01/2013
Batch run: 03/01/2013
Rev:03/01/2013