If burial funds are used for another purpose, consider that they were used in the
following order: non-excluded interest, non-excluded originally designated amounts,
excluded interest, and then excluded originally designated amounts. The penalty only
applies to the use of excluded funds (including excluded interest).
NOTE: This is important in determining if a redesignation is necessary. To determine if
redesignation is necessary, see SI 01130.410D.6.a. in this section.
EXAMPLE - Ms. Marquez designated $2,000 as a burial fund. We excluded $1,500 and counted $500.
The account grew to $2,200 as of April 2018 ($1,650 excluded and $550 non-excluded;
for information on prorating interest on commingled burial funds, see SI 00830.501) because of accumulated interest. Ms. Marquez used $750 for a non-burial purpose
in April 2018. The technician determined that the $750 used consisted of $550 in non-excluded
funds, all $150 of excluded interest and $50 of originally designated excluded burial
funds. A penalty of $200 applies ($150 of excluded interest and $50 of originally
designated excluded funds). Redesignation of the amount of burial funds is also necessary,
per SI 01130.410D.6. in this section.