State law requires the vendor of a pre-need burial agreement 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 may request a return of their funds at any time. The financial institution is merely
required to provide a five-day notice to the pre-need vendor by registered or certified
These contracts are revocable. However, State law specifies that:
“Upon written request, a purchaser of a pre-need funeral service contract may make
a certain amount of the pre-need funds irrevocable. The irrevocable amount may not
exceed the amount of the allowable asset exclusion used for determining eligibility
for (Medicaid) at the time the contract was entered. A purchaser of a pre-need funeral
service contract has forty-five days from entering the contract to cancel the irrevocable
part of the contract by giving notice to the cemetery association or licensed funeral
establishment with whom the contract was entered.”
A resident of North Dakota wishing to have funds designated as irrevocable in a pre-need
burial contract must do so at the signing of the contract. Because the purchaser has
forty-five days in which to cancel, the entire value of the contract is revocable,
and the entire value is a countable resource until the forty-sixth day. On the forth-sixth
day the portion designated as irrevocable is no longer a resource for SSI purposes.
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 requests that a portion of the contract be made irrevocable, the
entire value of the contract would be a resource for December and January. Beginning
February 1st the portion designated as irrevocable would no longer be a resource.
The amount identified as irrevocable can not exceed the allowable asset exclusion
in the State's Medicaid program. That limit is currently $3,000.