On August 17, 1994, you asked us to review under Indiana law a Forethought life insurance-funded
                  burial agreement for Heath L. G~, an SSI beneficiary. The Forethought life insurance-funded
                  burial agreement package sold to Mr. G~ consists of: (1) a Forethought life insurance
                  policy purchased by the SSI beneficiary; (2) irrevocable transfer of ownership of
                  the life insurance policy to the Forethought Trust in Batesville, Indiana; (3) a Statement
                  of Funeral Goods and Services (the funeral planning agreement) between the insured
                  individual and a particular funeral home; and (4) revocable assignment of the proceeds
                  of the life insurance policy to the funeral home.
               
               You have specifically asked if the Forethought documents result in an irrevocable
                  trust that is valid under Indiana law. In our opinion, under both the documents and
                  State law, ownership of the Forethought life insurance policy has been irrevocably
                  assigned to a trust and the SSI applicant neither owns nor has the legal right to
                  direct the use of trust assets to meet his support and maintenance needs. Therefore,
                  absent other considerations, the cash surrender value (CSV) of the policy is not a
                  resource of the purchaser for SSI purposes. This is true even though, as required
                  by Indiana law, the purchaser (and his representatives and survivors) retain the right
                  to change the funeral firm that will provide the burial goods and services.
               
               DISCUSSION
               Indiana law explicitly describes the necessary requirements of a funeral trust created
                  after July 1, 1982. West's Indiana Code at § 30-2-10-1 et seq. Under § 30-2-10-2,
                  payments must be made to a trust account in one of several specified institutions,
                  which include a trust company such as Forethought Trust. To be a valid funeral trust,
                  under § 30-2-10-3, it must also: (1) be irrevocable; (2) have only one settlor; (3)
                  name a licensed funeral home as sole beneficiary; and (4) be accompanied by a written
                  contract between the settlor and the beneficiary. In this case, the settlor of the
                  trust is the insured SSI beneficiary. Under § 30-2-10-5, the contract must contain
                  numerous provisions, which include a description of the funeral merchandise and the
                  place of funeral. Significantly, the settlor must acknowledge "that he understands
                  the irrevocable nature of the trust." Id., § 30-3-10-5(4). However, the agreement must also permit the settlor to change the
                  beneficiary. Id., § 30-3-10-5(11). Finally, under § 30-2-13-11(b), the contract may
                  use a life insurance policy as consideration so long as: (1) the seller is trustee
                  if ownership of the life insurance policy is irrevocably assigned to the seller; or
                  [as here] (2) a life insurance company that establishes a trust for the purposes of
                  holding and administering life insurance policies and annuity contracts issued by
                  the company to fund prepaid funeral services contracts.
               
               In our opinion, the Forethought package you have sent us complies with all the foregoing
                  statutory requirements. The irrevocable assignment of policy ownership to the Forethought
                  Trust states that the owner assigns ownership of the life insurance policy to the
                  Forethought Trust, that the owner understands that the transfer is permanent, that
                  the owner renounces his or her power to control ownership of the policy, and that
                  the owner waives all rights under the policy to surrender it for cash and to obtain
                  a loan against the policy. At the same time, the owner states, as required by Indiana
                  law, that the assignment of ownership does not restrict the purchaser (or his or her
                  representative or family) from revoking the assignment of the proceeds of the policy
                  to the designated funeral establishment at any time prior to the funeral. The Forethought
                  package therefore creates an irrevocably assigned trust, even though the beneficiary
                  of the trust may be changed to another funeral home by the insured individual.
               
               This result is consistent with SSI policy. In response to an inquiry on behalf of
                  Forethought, SSA Commissioner Gwendolyn S. K~ summarized SSI's policy in a July 8,
                  1991 letter to Congressman Andy J~, Jr. She stated that revocably assigned policies
                  could be placed in trust to avoid having them count as resources in determining eligibility
                  for SSI if: (1) the state allows insurance policies funding a funeral arrangement
                  to be placed irrevocably in trust; and (2) if such a policy is placed in trust, the
                  individual must have no access to it. On August 8, 1991, Associate Commissioner for
                  SSI Rhoda M. G. D~ gave Mark A. W~, counsel for Forethought, essentially the same
                  opinion. She stated:
               
               If an individual irrevocably transfers ownership of a life insurance policy to a trust
                  and neither owns nor has the legal right to direct the use of trust assets to meet
                  his or her support and maintenance needs, the cash surrender value (CSV) of the policy
                  is not a resource for SSI purposes. The provisions of the document titled "Change
                  of Ownership to the Forethought Trust" meets these requirements. Under the terms of
                  the document, the CSV is not a resource even though the individual retains the right
                  to change the funeral firm that will provide the burial goods and services.
               
               We agree that a revocably assigned policy placed in an irrevocable life insurance
                  trust will be treated exactly the same as an irrevocably assigned life insurance policy.
                  In both cases, the CSV of the policy is not a resource for SSI purposes since the
                  individual neither owns nor can legally use the CSV for support and maintenance. With
                  respect to a life insurance-funded burial arrangement, State law must permit a policy
                  which funds such an arrangement to be placed irrevocably in trust in order for the
                  policy's CSV not to be considered a resource.
               
               We have previously been advised that a POMS clarification would be issued that would
                  state essentially the same thing.
               
               CONCLUSION
               For the foregoing reasons, the Forethought purchaser has irrevocably assigned ownership
                  of the life insurance policy to a trust so that he neither owns nor has the legal
                  right to direct the use of trust assets to meet his support and maintenance needs.
                  This arrangement is consistent with and valid under Indiana law. Therefore, absent
                  other considerations, the cash surrender value (CSV) of the policy is not a resource
                  for SSI purposes.