State law requires the vendor of a pre-need funeral service contract, including irrevocable itemized funeral contracts, to deposit funds received from the sale of the agreement in a saving account or a certificate of deposit (CD) held by a trust company or a federally insured financial institution within the State. The vendor is required to maintain a record of each sale, and to file an annual report with the State securities commissioner showing the purchaser, beneficiary, the amount received, (including all installments), and the name and address of the institution where the funds are deposited.

State law also provides that the purchaser of a pre-need funeral service contract may request a return of their funds at any time (if the contract is revocable). The financial institution is merely required to provide a five-day notice to the pre-need vendor by registered or certified mail.

These contracts are generally revocable. However, a purchaser may designate a portion of the pre-need fund as irrevocable. This designation will be part of the original contract. Effective April 1, 2019, there is no limit to the amount that a purchaser may designate as irrevocable. Effective March 1, 2021, all pre-need burial funds must be placed in an irrevocable itemized funeral contract in order to meet the North Dakota Pre-Need Burial Provision. An "irrevocable itemized funeral contract" means an irrevocable pre-need funeral service contract that is an itemized listing of goods and services that will be received based on the contract. Payments made under an irrevocable itemized funeral contract must be carried in a separate account or certificate of deposit and must be fully transferable to another cemetery association or funeral establishment. Recipients are no longer "grandfathered" into prior provisions allowing the exclusion of funds placed in other financial instruments/agreements. Therefore, if any pre-need burial funds are not switched to an irrevocable itemized funeral contract by March 1, 2021, the policy is revocable, and only $1,500 is excludable under the SSI burial funds provision.

A person who purchases an irrevocable itemized funeral contract has 45 days in which to cancel the irrevocable part of the contract. During this 45-day period, the entire value of the contract is revocable and therefore countable for SSI purposes. On the 46th day, the portion designated as irrevocable is no longer a resource for SSI purposes (SI 01130.420). Once the contract is irrevocable, the purchaser is unable to request and receive the return of these funds.

The First-of-the-Month rule is used to make SSI resource determinations. For example, if an individual purchases a pre-need burial contract on November 20^th and, at that time, designates a portion of the contract as irrevocable, the value of the contract in excess of $1,500 would be a resource for December and January. Beginning February 1^st the portion designated as irrevocable would no longer be a resource.

Some individuals may have funded their pre-need funeral arrangements by establishing a separate bank account or CD made POD to the funeral home or cemetery. Some of these bank accounts may have been incorrectly excluded from resources. Because the owner of the CD or bank account is alive, he or she is still the owner of the account. The “POD” designation does not transfer ownership from the individual to the funeral home until the owner is deceased.

In these situations, even though a pre-need funeral service contract exists, and even though the contract specifies that certain burial space items are intended to be purchased upon the individual's death, only the general $1,500 burial funds exclusion applies (to the extent it has not been used elsewhere). Amounts in excess of this limit are not excluded under the burial space exclusion because the funds are not paid to the funeral home for burial space items while the individual is living. Since the burial space is not paid for until the customer's death, the customer still retains possession and control of the funds.

Recipients having a CD or bank account POD to a funeral establishment, either as their sole source of burial funds, or in addition to a pre-need contract, must be identified during the redetermination process. The interviewer should explain that only up to $1,500 of the POD instrument may be excluded as burial funds, even though the account is titled “POD” to the funeral home.

Individuals having in excess of $1,500 in burial funds, and having other countable resources, may exceed the resource limit. They may wish to revise their pre-need arrangements.

The interviewer should inform the individual of the burial space exclusion. Although we are unable to advise a recipient on how to dispose of funds, we can suggest they talk with the funeral provider to examine options. The recipient may wish to consider canceling the existing revocable contract, and create a new contract which is irrevocable in whole or in part. See A above.

Recipients with POD accounts (B above) that affect eligibility may wish to consider the following two options to retain eligibility.

1. 1. 

   They may create and fund an irrevocable itemized funeral contract. The irrevocability would be effective the first of the month following the 45-day cancellation period as described in section A.

2. 2. 

   They may purchase or contract for purchase of burial space items. The value of burial space items is totally excluded from resources (SI 01130.400).

On August 1, 2019, the North Dakota Pre-Need Burial Provision was amended to require new applicants to utilize an irrevocable itemized funeral contract; at the time, individuals with already established pre-need burial fund contracts were "grandfathered" into prior provisions. On February 15, 2021, the North Dakota Pre-Need Burial Provision was further amended to require previously "grandfathered" recipients to switch those contracts/funds to an irrevocable itemized funeral contract as well; the deadline for this conversion was March 1, 2021. If an interviewer identifies a recipient who had a pre-need funeral service contract that was excluded under the previous North Dakota Pre-Need Burial Provisions, they must confirm that the funds were converted to an irrevocable itemized funeral contract by March 1, 2021. Beginning with March 1, 2021, any funds that have not been converted to an irrevocable itemized funeral contract are no longer excluded under the North Dakota Pre-Need Burial Provision and are only subject to the general $1,500 burial funds exclusion (to the extent it has not been used elsewhere). For any case-specific guidance, please refer the case via email to ||SEA CPS.

The recovery of an overpayment is waived when the liable individual (see SI 02201.020) is without fault (see SI 02260.010) in causing the overpayment, and recovery or adjustment would:

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  Defeat the purpose of title XVI of the Act (see SI 02260.020); or

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  Be against equity and good conscience (see SI 02260.025); or

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  Impede effective or efficient administration of title XVI of the Act (see SI 02260.030) because of the amount involved.

Individuals, who relied on SSA's prior determination, that individually held CDs or other financial instruments made POD to a funeral or cemetery provider were wholly excluded, are without fault in causing the overpayment. Adjudicators may waive any overpayments caused by these incorrect determinations, assuming all other waiver criteria are met.

Under the rules of administrative finality, some individuals may be found retroactively ineligible in excess of 12 months. Generally a new application must be taken after 12 consecutive months of suspension. SI 02301.205B lists situations which permit reinstatement rather than a new claim after 12 consecutive months of suspension. SSI benefits can be reinstated without a new application if:

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  an individual does not appeal a determination or decision and reestablishes eligibility during a 60 day appeal period or

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  if an individual appeals a determination and reestablishes eligibility during the administrative appeals process or civil suit.