Irrevocable Burial Trust
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Creating An Irrevocable Burial Trust

When you create your estate plan, make sure to think about the potential of establishing an irrevocable burial trust. This somewhat simple legal documentation may enable you to both pay funeral expense and ensure Medicaid benefits for long-standing care.

If you are establishing an estate plan, in addition to covering the allocation of your assets, you need to make arrangements for managing funeral costs. You also need to consider how to deal with the possible need for long-term care payment. One way to accomplish this is utilizing an irrevocable burial trust.

Creating an Irrevocable Burial Trust

Funeral arrangements are made following an individual passing away and are paid from the person’s estate or life insurance or, should the estate not have adequate assets, by family members. Many companies sell insurance policies generally referred to as funeral expense, final cost, or burial insurance, but these are different from a burial trust.

Individuals make and pays for funeral arrangements ahead of time utilizing a pre-paid or pre-arranged funeral plan. Using this arrangement, you devote of having the services managed by the funeral home in which you bought the plan, which can be a disadvantage should you move far away or if the funeral home closes down.

The individual establishes a burial trust, which they place funding in to cover funeral costs.

Burial trust fundamentals

A trust is legal documentation, usually known as a trust agreement or contract, in which an individual earmarks a specific amount of funds to be used for a certain intention. In cases of a burial trust, that intention is to pay for funeral costs. The individual creating the trust is known as the trustor, grantor, or trust creator. The document appoints an individual, known as the trustee, to retain and oversee the trust funds.

When the trust agreement enables the grantor to revoke or remove funds from the trust, it is referred to as a revocable trust. An irrevocable trust does not enable the grantor to revoke or alter it.

One advantage of this type of trust is it frees your family members from having to handle payment arrangements of funeral costs. When the burial trust is an irrevocable one, it also can aid you in being eligible for Medicaid benefits should long-term care be required.

One disadvantage to this type of trust is that you need to have funding available to place and hold in the trust. For instance, if you decide you need $11,000 for funeral cost, you need to place $11,000 into the trust and can no longer have access to it for other intents.

Medicaid planning

One other thing to take in to consideration in estate planning is the possible requirement for long-term care. As with burial costs, the options for long-term care are to do nothing and deal with the circumstances if and when it comes up, or to plan a head of time. Those decide to do nothing are in effect betting that they are going to pass away before the requirement for long-term care comes up. If you decide to plan in advance, you can either buy long-term care insurance or establish your estate plan so that you can be eligible for Medicaid payment of long-term care expenses.

Medicaid payment for long-term care is only available to individuals that have limited income and assets. The Medicaid qualification guidelines, in which are complicated, restrict the amount of funding that can be put in a burial trust and differ by state. Consequently, it is important to have professional estate-planning help.

As of 2019, an individual may have at most $2,000 in assets for qualifying for Medicaid. Nevertheless, not all kinds of assets count. For instance, a primary home, vehicle, burial plot, and pre-paid funeral bundles are uncountable assets. Nor are assets in a correctly devised irrevocable trust.

Having more than $2,000 in countable assets, you have 2 choices:

Spend the extra on long-term care until you only have $2,000 remaining, then apply for Medicaid. The extra funds go to the nursing home, leaving nothing available for funeral expenses.

Put the extra in an irrevocable trust, in which takes them from what Medicaid guidelines deem countable assets. You can accomplish this with one and/or more irrevocable trusts. For instance, say you have $111,000 in extra assets. Since funeral costs is not going to cost as much, you could place $11,000 in an irrevocable burial trust and the leftover funds in an irrevocable living trust for your descendant’s benefit.

Establishing an irrevocable burial trust

Irrevocable burial trusts are somewhat simple to establish. Nevertheless, to successfully accomplish its objectives, the trust needs to conform with Medicaid eligibility guidelines, so you might wish to speak with an estate-planning professional.

Many insurance companies and funeral homes are going to offer to establish a burial trust, as themselves as the trustee, but this is usually not wise. An insurance company is going to likely charge a sizable fee for serving as trustee. Having a funeral home serve as your trustee, you risk being charged higher costs for funeral expenses, in addition to the possible loss of your funds should they go out of business or declare bankruptcy. The funeral home’s trust agreement might also name itself as beneficiary, meaning that your family is unable to choose a different funeral home.

Irrevocable burial trusts are not for everyone, but for some it might be the best way to pay for funeral costs—and to help be eligible for those all-important Medicaid benefits.


  1. Edward A. Haman, E. (2023, February 14). Creating an irrevocable burial trust. LegalZoom. Retrieved March 10, 2023, from

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