New York State Funeral Directors Association

Special Considerations for Medicaid/SSI Applicants & Recipients

All citizens – regardless of income – are entitled to and deserving of both a proper funeral service and a burial with dignity and respect. In fact, federal and state laws support this guiding principle in a number of ways.

First, any person applying for Medicaid/SSI can set aside funds for the sole purpose of paying their funeral/burial expenses as part of the spend-down process to Medicaid/SSI eligibility. The funeral/burial funds set aside will not be counted as part of the individual's financial resources. A Medicaid/SSI eligible individual must first notify his or her caseworker that funds will be set aside to pay their funeral/burial tax expenses.

Second, New York State law requires that 100% of these funeral/burial funds be placed in an irrevocable trust account, making certain that they will be available when needed and used for no other purpose than what they were intended. A trust which is titled 'irrevocable' means that any refund or withdrawal, for any purpose, will and must legally be refused by the funeral director and/or funeral trust or financial institution.

  • An applicant/recipient of Medicaid/SSI may also set aside funds in irrevocable funeral trust accounts for the following immediate family members:
  • Spouse
  • Children
  • Step-Children
  • Siblings
  • Parents
  • and spouses of those individuals listed above

Please note that when the original purchaser passes away, the beneficiary (family member) becomes the new purchaser and taxpayer. If there is any excess money in the preneed account after the funeral and burial charges have been paid, the overage will go to the county where the decedent resided.

The funds used to establish an irrevocable preneed funeral account must be used only for reasonable and common funeral expenses for such things as professional services, transportation, facilities and merchandise, as well as cash advances to cover the cemetery and other related charges.

Finally, the individual has the right to use any funeral home they choose. The funeral home selection may be changed at any time, for any reason.

We are proud to say that our Association and our more than 3,500 licensed funeral director members helped to create the law that allows Medicaid and SSI recipients to plan ahead for their final wishes.