If a burial contract is revocable or salable, and any conditions for its liquidation do not present a significant hardship (see C.1. below), it is a resource. However:

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  any portion of the contract that clearly represents the purchase of burial spacesmay be excludable,regardless of value (SI 01130.400); and

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  some or all of any remaining value of the contract may be excludable as burial funds(SI 01130.410).

If a burial contract cannot be revoked and cannot be sold without significant hardship, it is not a resource. However:

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  any portion of the contract that represents burial funds reduces the $1,500 maximum otherwise available for the burial funds exclusion; but

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  any portion that represents the purchase of burial spaces has no effecton the burial funds exclusion.

State law determines whether a contract is revocable. Some burial contracts may be partly revocable. For example, if the total value of an otherwise irrevocable contract exceeds the limit set for irrevocability by State law, the excess is revocable. See regional instructions for details.

Prepaid burial contracts do not include burial insurance as defined in SI 01130.300 or burial trusts as described in SI 01120.201H.

If an individual contracts with a provider of burial services and the provider places the funds in trust, this constitutes a “purchase” and not a “transfer” of funds under SI 01150.110.

A prepaid burial contract, even when not technically irrevocable, may have conditions attached to its liquidation or revocation. If either of the following conditions exists, the contract is not a resource.

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  Significant hardshipmay result from the conditions required for selling or revoking a contract. Significant hardship means an unrealistic demand on the buyer; e.g., having to move out of state. If an adjudicator determines that such would be the case, the file must contain a determination to that effect.

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  State law or contractual terms may require mutual consent of buyer and seller in order to sell or revoke a contract. If the seller will not consent, or will consent only under conditions that would pose a significant hardship to the buyer,the file must reflect those facts.

NOTE:If a condition creating hardship or some other obstacle to liquidation is not evident on the face of the contract,assume it is revocable or salable and,therefore, a resource. The burden is on the claimant/ recipient to provide evidence to the contrary.

If a burial contract is a resource,we use as its value:

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  the amount payableto the owner upon revocation; or

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  if the contract is not revocable but is salable, its CMV.

A single-purpose contract for burial expenses (SI 01130.410) includes only services that we consider burial funds and that are subject to, or reduce the amount of, the burial funds exclusion.

1. a. 

   Developinitially whether a prepaid burial contract exists and is a resource.

2. b. 

   Documentthe file with respect to:

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     revocability;

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     liquidity (as needed); and

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     value, if the contract is a resource or involves burial funds (unless the tolerance in SI 01140.010 B.2. applies).

3. c. 

   In posteligibilitysituations:

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     develop and documentany newly acquired contract per a. and b. above;

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     do not redevelopa contract if prior development showed that it is not a resource and does not contain burial funds;

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     redevelop and documenta contract if prior development showed that installment payments could affect applicability of the funds/ space exclusions or that it included burial funds (revocable or irrevocable).

For revocable burial contracts,State law usually sets refund guidelines that may vary by contract. If you cannot determine the refund amount by examining the contract, have the individual contact the provider or, if necessary,make the contact yourself.

If a contract is irrevocable but can be liquidated some other way (e.g., through sale), assumethat the contract's CMV is the amount that has been paid on it.

If the individual disagrees with this assumption, he or she can rebut it with an estimate from a disinterested knowledgeable source such as the State Funeral Directors Association or a local funeral director.

Develop and document the factors outlined in 1. above, following the guidelines above, as appropriate.

1. a. 

   Determinewhether the contract designates which portion (if any) is irrevocable.

2. b. 

   If designated, develop each portion as appropriate per SI 01130.400 or SI 01130.410.

3. c. 

   If the contract does not designate, apply the State maximum for irrevocability, if any, first to the total value of all burial spaces and then to the value of the burial funds. (See E. below for examples.) Any burial spaces not covered are subject to the burial space exclusion. Any burial funds not covered are subject to the burial funds exclusion.

4. d. 

   If you cannot determinewhich amounts represent the purchase of spaces and which represent burial funds, and which parts of the contract, if any, are irrevocable,the individual has not satisfactorily identified funds versus spaces. In that event,consider the entire contract as a resource in the form of burial funds.