SSI allows you to set aside money for burial expenses without it counting toward your $2,000 resource limit. Here's how to take advantage of this exclusion.
In this article, we'll cover:
- Burial fund exclusion
- How to set it up
- Burial spaces and plots
- Insurance considerations
1. Burial Fund Exclusion
What's allowed:
- Up to $1,500 for burial expenses
- Per person (you and spouse)
- Designated specifically for burial
- Excluded from SSI resources
What it covers:
- Funeral costs
- Burial or cremation
- Casket or urn
- Related expenses
Requirements:
- Must be designated for burial
- Kept separate from other funds
- Clearly identifiable
- Documented
For a couple:
- Each person can have $1,500
- $3,000 total for couple
- Both must be on SSI
- Separate designation for each
2. How to Set It Up
Designation methods:
- Written statement
- Separate bank account labeled "burial fund"
- Burial contract
- Documentation showing purpose
Written statement:
- Clearly state the amount
- That it's for burial expenses
- Sign and date it
- Keep with financial records
Separate account:
- Open account designated for burial
- Label it clearly
- Keep documentation
- Don't mix with other funds
What SSA needs:
- Clear designation
- Identifiable funds
- Separate from general savings
- Report to SSA
Important: The key is designation. The money must be clearly set aside for burial, not just savings.
3. Burial Spaces and Plots
Unlimited exclusion:
- Burial plots excluded entirely
- No dollar limit
- For you and immediate family
- Separate from the $1,500
What's included:
- Burial plots
- Gravesites
- Crypts
- Mausoleums
- Urns
For family:
- Your plot
- Spouse's plot
- Children's plots
- Parents' plots
- Siblings' plots
Why this matters:
- Can buy plots without affecting SSI
- Good use of resources
- Prepaying excluded
- Family covered
4. Insurance Considerations
Life insurance and burial funds:
- Life insurance cash value may count
- Under $1,500 cash value usually excluded
- Over $1,500: Counts as resource
- Burial insurance different from life insurance
Burial insurance:
- Insurance specifically for burial costs
- May be excluded
- Depends on policy type
- Check with SSA
Irrevocable burial trusts:
- Can prepay funeral expenses
- Money becomes unavailable to you
- Not a resource
- Common way to handle this
What's counted:
- Cash surrender value of life insurance
- If over $1,500 face value: May count
- Complex rules
- Verify your specific situation
Reducing Countable Resources
Using burial fund exclusion:
- Have $3,000 in bank
- Designate $1,500 as burial fund
- Countable resources: $1,500
- Now under limit
Combining strategies:
- $1,500 burial fund (excluded)
- Home (excluded)
- One car (excluded)
- Household goods (excluded)
- Remaining resources under $2,000
Prepaid Funeral Contracts
Benefits:
- Lock in prices
- Money excluded
- Peace of mind
- Less for family to handle
Irrevocable contracts:
- Can't get money back
- But not a resource
- Fully excluded
- Commonly used
Revocable contracts:
- Can get money back
- May count as resource
- Less SSI-friendly
- Check terms carefully
How Purple Helps
- Track designated burial funds
- Monitor total resources
- Keep under SSI limits
- Organize your finances
- Clear record keeping