What Funeral and Burial Arrangements Can Dad Pay For Without a Medicaid Problem?

Arturo's Question

Arturo is 87 and lives in Hialeah. He is a composite I am using to illustrate a question I hear often, not an actual client. His wife died several years ago and is buried in a local cemetery. Arturo wants to be buried beside her, and he has some modest savings he set aside years ago for exactly that purpose. Now that he needs nursing home care and the family is looking at a Medicaid application, his daughter has frozen. She is afraid that spending a dollar on a casket or a headstone will somehow disqualify him, so she has stopped signing anything and is sitting on paperwork she does not understand.

This is one of the most common fears I see in Medicaid planning, and it is usually unfounded. Florida law specifically carves out room for burial and funeral planning. The key is knowing which arrangements are protected automatically, which ones need a specific legal step to become protected, and which ones can actually create a problem if left alone.

Burial Plots and Spaces for the Family

Florida Medicaid does not count burial spaces as an asset, and it is generous about who counts as family for this purpose. An applicant can own, outright and without affecting eligibility, burial spaces for:

• Himself and his spouse
• His children, whether biological, adopted, or step, regardless of their age
• His siblings
• His parents
• The spouses of any of the above

"Burial space" is read broadly. It includes the cemetery plot itself, but also a mausoleum crypt, an urn, a casket, a vault, the cost of opening and closing the grave, and a headstone or marker. For Arturo, this means the plot next to his wife, along with a vault and a marker for himself, are not countable resources at all. He does not need an irrevocable contract or any special designation to protect these. If he already owns the plot, or buys one before applying, it simply does not appear on the Medicaid asset ledger.

The Irrevocable Prepaid Funeral Contract

This is the tool that does the heaviest lifting in most Medicaid burial planning, and it is where Arturo's daughter needs the clearest answer. Florida allows a preneed funeral contract, the kind sold by a licensed funeral home or preneed sales agent, to be exempt from the Medicaid asset count with no dollar cap, but only if the contract is made irrevocable.

Under Florida's preneed funeral and cemetery law, most preneed contracts are written as revocable by default, meaning the purchaser can cancel and get a refund. Florida law specifically allows a purchaser who is an applicant for, or recipient of, Medicaid (or SSI, or Temporary Cash Assistance) to convert that contract to irrevocable status. Once it is truly irrevocable, it cannot be canceled by the family during Arturo's life or after his death, and the funds inside it are no longer his to reach. Because he can never get the money back, Medicaid does not count it as an available resource, regardless of the amount.

If Arturo has, say, several thousand dollars set aside with a funeral home from years ago, converting that existing contract to irrevocable, rather than canceling it and starting over, is often the cleanest and fastest move before an application goes in.

The Small Designated Burial Fund

Separate from a prepaid funeral contract, Florida Medicaid also allows an applicant, and separately a spouse, to set aside a modest amount of money in a designated burial fund. This is typically a bank account, certificate of deposit, or similar asset specifically earmarked in writing for burial and funeral expenses rather than run through a funeral home contract. This designation can be made in the months leading up to the application, including in the look back window, without creating a transfer penalty, because setting aside your own money for your own funeral is not a gift.

The designated amount is capped at a modest, fixed figure set by Medicaid rules. It is worth noting this fund is counted separately from, and is not reduced by, any irrevocable funeral contract or exempt life insurance Arturo may also have. Families should ask their elder law attorney or the Department of Children and Families eligibility specialist for the current exact figure, since relying on an outdated number found online can cause a family to under or over designate funds.

What Revocable Arrangements Do Instead

If Arturo's funeral money sits in a plain savings account, or in a preneed contract that was never converted to irrevocable, Medicaid treats it very differently. A revocable arrangement, meaning one Arturo or his daughter could cancel for a refund, is still an available resource in the eyes of the Department of Children and Families. It counts toward the asset limit just like any other bank balance.

This is exactly the trap that was worrying Arturo's daughter, in reverse. She was afraid that spending money would hurt eligibility, when in fact leaving old, revocable funeral money sitting uncounted and undesignated was the real risk. The fix is not to avoid spending, it is to properly document the spending: convert what can be converted to irrevocable, designate what qualifies for the small burial fund exclusion, and purchase outright what is already exempt, like the burial plot itself.

Arturo's Daughter and the Receipts She Kept

Here is where the story resolves. Arturo's daughter had, almost by instinct, kept every receipt: the original cemetery deed for the plot next to her mother, the funeral home's old contract from years back, and a bank statement showing a small account she had labeled "Dad's funeral." None of that paper was useless, it was the exact proof a Medicaid eligibility worker, whether at the Department of Children and Families through ACCESS or reviewing documentation forwarded through CARES at the Department of Elder Affairs, would need to confirm each item's exempt status.

With those documents in hand, the family's attorney was able to confirm the plot was already exempt, have the funeral home execute the irrevocability addendum on the existing contract, and properly document the designated burial fund, all before the application went to DCF. Nothing had to be spent in a rush and nothing had to be hidden. It simply had to be labeled correctly under Florida's existing rules.

This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida estate, elder, probate, and real estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.