Medicaid Burial Allowance
Medicaid burial allowance and the burial-fund exemption
Eligibility, dollar amounts, and how to claim
Medicaid recipients in every U.S. state are permitted to designate a small amount — typically $1,500 — as an exempt 'burial fund' that does not count against the Medicaid asset limit. The exact amount, the form (cash, bank account, irrevocable burial contract, or insurance) and the rules on commingling vary by state.
The burial fund exemption
Federal Medicaid policy permits each Medicaid recipient to designate a burial fund of up to $1,500 in liquid assets (cash, bank accounts, or face value of a designated insurance policy) without affecting Medicaid eligibility. The exemption applies in addition to the standard $2,000 asset cap for an individual ($3,000 for a couple) in most states.
States can set a higher exemption; some states allow $1,500 plus the cash value of an irrevocable burial contract of any amount.
What qualifies
- Designated bank account. A bank account specifically labeled as a burial fund. Not commingled with general spending.
- Burial-funded life insurance policy. Up to $1,500 face value, designated for funeral expenses.
- Irrevocable burial contract. A pre-need contract with a funeral home that is irrevocable and assignable. Most states permit unlimited value if the contract is properly structured.
- Burial space items. Cemetery plot, vault, urn, casket, opening-and-closing fee, and headstone or marker, in addition to the $1,500 cash exemption. Burial spaces themselves are unlimited.
State-specific maximums
Medicaid burial fund exemption — sample states
| State | Cash exemption | Notes |
|---|---|---|
| Federal floor | $1,500 | Plus burial spaces unlimited |
| California | $1,500 | Plus irrevocable contract any amount |
| Florida | $2,500 | Higher state exemption |
| New York | $1,500 | Plus burial spaces |
| Texas | $1,500 | Plus irrevocable contract any amount |
| Illinois | $1,500 | Plus burial spaces unlimited |
| Pennsylvania | $1,500 | Plus irrevocable contract any amount |
Common mistakes
- Putting funds into a regular checking account without designating it as a burial fund. The funds count toward the $2,000 asset cap and threaten Medicaid eligibility.
- Buying a revocable pre-need contract. Revocable contracts count as a Medicaid asset; only irrevocable contracts qualify for the unlimited exemption.
- Funding the burial fund within the Medicaid look-back period (60 months) without proper structuring. Recent transfers can trigger a Medicaid penalty period.
Pricing source disclosure
Every dollar amount on Cheap Funeral is sourced from each funeral home's published General Price List (GPL) under the FTC Funeral Rule (16 CFR Part 453). The Rule requires every U.S. funeral home to provide an itemized GPL on request — by phone, in person, or in many cases online. Where a home has not published a GPL we mark the listing accordingly rather than estimate.
National benchmarks throughout this article are drawn from the National Funeral Directors Association 2023 Member General Price List Study (NFDA, July 2023), which reports the median U.S. cost of a funeral with viewing and burial at $8,300 and the median direct cremation at $2,495.
Common questions
Frequently asked
What if I have more than $1,500 set aside?
The amount above $1,500 in liquid assets counts toward the $2,000 Medicaid asset cap. Convert excess to an irrevocable burial contract or burial space items, which are exempt without limit.
Does the burial fund have to be in a separate account?
Yes, in most states. Commingling with general spending money disqualifies the exemption.
Related reading
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Cheap Funeral publishes the direct cremation, basic burial, and memorial service price for every U.S. funeral home that has filed a GPL. Browse by state, ZIP, or price tier.