On February 26, 2018, the Pennsylvania Department of Human Services (DHS) published an updated Burial Cost chart for 2018. Click this link to see the chart: 2018 PA Burial Limits. This chart provides the maximum amount under Pennsylvania’s Medicaid rules that can be used to fund an irrevocable burial reserve, or pre-paid funeral. The benefit of prepayment of funeral costs is that the prepayment or burial reserve is not counted as a resource when determining Medicaid eligibility.
Burial reserves are funds that an individual sets aside to pay for their funeral and burial costs. Often called a burial fund, burial reserve, or pre-paid funeral arrangement. In order to be an exempt asset for Medicaid the account must be irrevocable, which means that none of the funds may be withdrawn before the individual’s death. Additionally, the amount in the reserve or the amount used to pre-pay for the funeral cannot exceed the burial limit as set by Pennsylvania 55 Pa. Code § 178.5.
The limits set for the burial reserve change annually based on the average burial costs in each county. It is important to note that the maximum amount is based on burial and not cremation which tends to be less. Each county conducts a survey to local funeral homes within the county to determine the average costs.
Montgomery County Burial Reserve Limit
In Montgomery County, the burial reserve limit is $12,500.00 with 25% extra being allowed for extraordinary costs related to the burial, for a total burial reserve limit of $15,625.00 for 2018. For Chester County, the burial reserve limit is significantly more at $20,589.00 with 25% extra being allowed for extraordinary costs related to the burial, for a total burial reserve limit of $25,736.25 for 2018. In order to demonstrate that the 25% extra is required for extraordinary costs the documentation from the funeral home can demonstrate extra costs due to:
- The cost of transport of the body because burial will not be local.
- The arrangement for a priest, minister or rabbi who is a close friend or relative and lives some miles away to conduct the memorial services with the cost of travel, food, lodging and honorarium to be paid from the irrevocable burial reserve.
- Arrangements include a reasonable gift to the church or synagogue for the use of the facilities for the services.
Pre-paying for funeral costs or establishing a burial reserve is a great tool to be used when applying for Medicaid. However, before funding a burial reserve or pre-paying for your funeral you should consult with an elder law attorney. In the event that the account is overfunded or not set up properly, it could result in a denial of Medicaid benefits. Additionally, excess funds remaining from the irrevocable burial reserve after the burial expenses are paid become a part of the deceased recipient’s estate. The excess funds that become part of the deceased’s estate may be subject to an estate recovery claim by DHS to the extent of the Department’s claim for Medicaid. OWM has Montgomery county elder law attorneys, Chester county elder law attorneys, Bucks County Elder law attorneys, and Berks County Elder law attorneys. Call OWM Law to schedule an elder law consultation today.
— Written by Rebecca A. Hobbs, Esq., CELA*
*Certified as an Elder Law Attorney by the National Elder Law Foundation as authorized by the Pennsylvania Supreme Court.