Burial Trust: Prepay Burial Costs and Protect Your Savings
A burial trust sets aside money for your burial now, so your family does not pay for it later. When the burial trust is irrevocable, Medicaid does not count that money, up to your state's limit. This page explains what a burial trust is, what it covers, how it differs from a bank account set aside for burial, and how to set one up.
What Is a Burial Trust?
A burial trust is money placed in a trust to pay for burial goods and services. When you pass, the money goes to pay for the burial you planned.
You will also hear it called a funeral trust or a burial expense trust. The names overlap. What matters most is one word: irrevocable.
An irrevocable burial trust cannot be canceled or cashed out. Because you cannot take the money back, Medicaid does not count it as an asset, up to your state's limit. A revocable plan can be canceled, so Medicaid counts it.
Burial Trust vs. Funeral Trust
Many people use the terms the same way. When there is a difference, it is in what the money pays for.
Funeral trust
A funeral trust usually covers the full funeral, including the service, staff, and transportation.
Burial trust
A burial trust usually focuses on burial goods, such as the casket, vault, opening and closing of the grave, and the headstone.
The trusts I offer can cover both. We plan the amount around the burial or funeral you want. Learn more about how a funeral trust works.
What a Burial Trust Can Cover
The casket or urn.
The burial vault or grave liner.
Opening and closing of the grave.
The headstone or marker.
Funeral home services and the service itself.
Transportation of the body.
We use a funeral home price list to set an amount that matches these costs.
Burial Space Items Medicaid Does Not Count
Some burial items are not counted by Medicaid at all, separate from a burial trust. Under federal SSI rules, which many state Medicaid programs follow, burial space items do not count. These include a burial plot, crypt, casket, urn, vault, headstone, and the opening and closing of the grave.
In Iowa, one burial space per person is not counted.
This means you can buy a burial plot outright and also fund a burial trust for the rest of the costs. We look at both on our call.
Irrevocable Burial Trust vs. Burial Account
Many families open a savings account and label it for burial. That feels safe, but Medicaid treats it differently.
Burial account at a bank
A burial trust account at a bank is usually revocable. You can still withdraw the money, so most of it counts as an asset. Under federal rules, only $1,500 set aside for burial is excluded. Iowa follows the same $1,500 rule.
Irrevocable burial trust
An irrevocable burial trust is locked in for your burial. Medicaid does not count it, up to your state's limit. That is why families going through a Medicaid spend down choose the irrevocable route.
How Much Should Go in a Burial Trust?
Fund the trust to match what the burial and funeral will cost, within your state's limit.
$6,696
Nebraska funeral trust limit.
$13,125
Average Iowa funeral cost. Amounts above it need an itemized list.
$15,000
Limit in most states, or less.
Do not put in more than the burial will cost. The extra can be treated as a gift and can delay Medicaid.
Who Should Consider a Burial Trust
A parent who may need nursing home care in the next few years.
A family in a Medicaid spend down that needs to move savings into an allowed purchase.
Anyone who wants a traditional burial and does not want family paying for it.
Married couples who want a plan for each spouse.
There are no health questions, so everyone qualifies. I offer burial trusts in every state except Michigan and New York.
How to Set Up a Burial Trust
Burial trusts are not sold online. Every plan starts with a call. We review your state's limit, price the burial, and complete the paperwork together by phone or in person. See each step on how to buy a funeral trust.
Burial Trust FAQs
What is a burial trust?
A trust that holds money to pay for burial goods and services. When it is irrevocable, Medicaid does not count it, up to your state's limit.
Is a burial trust the same as a funeral trust?
The terms overlap. A burial trust often focuses on burial goods, and a funeral trust covers the full funeral. The trusts I offer can cover both.
Does a bank account set aside for burial count for Medicaid?
Yes, mostly. Only $1,500 set aside for burial is excluded under federal rules. An irrevocable burial trust is protected up to your state's limit.
Can I buy a burial plot and a burial trust?
Yes. A burial plot is often excluded from Medicaid on its own. A burial trust can cover the other costs.
Can I set up a burial trust if my parent is in a nursing home?
Yes. There are no health questions. Set it up before the Medicaid application is filed.
Plan Your Burial Trust Today
One call shows you your state's limit, what a burial costs where you live, and how much a trust can protect. There is no cost and no obligation.
Funeral Trust Gal is part of the Aging Parent Resource Center.
Sara Guida is a licensed insurance agent, not an attorney, and does not represent any state Medicaid agency. Content on this site is general education, not legal or financial advice. Medicaid rules and funeral trust limits vary by state.