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
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 20th 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 1st the portion designated as irrevocable would no longer be a resource.