Medicaid Allowable Expenses Cemetery Property

Yes, it is “legal” for a nursing home resident to purchase cemetery property (burial spaces) for their children and their children’s spouses. For the purpose of answering this question, we are assuming the nursing home resident is not already on Medicaid and may wish to apply for benefits in the future.

For an applicant to be eligible for Nursing Home Medicaid, they must have limited assets. While there are state-specific limits, generally speaking, the asset limit is $2,000. Medicaid does not, however, count some assets towards this limit. This includes one’s primary home if the applicant lives there (or intends to return) and has an equity value interest under a state-specific value. If the applicant has a spouse who lives in the home, it is automatically exempt. Other exemptions include household items, personal items, and a vehicle. Relevant to the above question, burial spaces are also exempt from the asset limit.

Applicants over Medicaid’s asset limit are required to “spend down” their excess assets in order to meet the asset limit, and hence, qualify for benefits. One way in which applicants can do so is by purchasing burial spaces for themselves and their immediate relatives. This includes their children (biological, adopted, step) regardless of age, siblings, biological or adoptive parents, and the spouses of these persons. To further define burial spaces, this may include burial plots (cemetery plots), mausoleums, crypts, urns, caskets, vaults, grave opening and closing, and headstones. Some states may require that the purchase of burial spaces be irrevocable, meaning the purchaser cannot sell or be reimbursed for these items. Stated differently, if the burial spaces are revocable, they may not be exempt from Medicaid’s asset limit.

Now, getting to the “legal” part of your question. It is our assumption that you are asking if the purchase of cemetery property is a violation of Medicaid’s Look-Back Period, which is a 60-month period during which Medicaid “looks back” at all past asset transfers immediately prior to long-term care application. If assets have been transferred for less than fair market value, or gifted, a period of Medicaid ineligibility will result. This is because Medicaid will assume it was done to meet the asset limit. In most cases, the purchase of cemetery property is not a violation of the Look-Back Period. As mentioned above, a state may require that the purchase be irrevocable. If this is the case, and the purchase is not irrevocable, it is a violation of the Look-Back Period.

Another option to “spend down” assets and also plan for the future is to purchase Irrevocable Funeral Trusts. This planning technique is complicated, and if not done properly, can violate Medicaid’s Look-Back Rule. In addition, the rules and regulations are state-specific. If you are considering this option, it is highly recommended that you seek the counsel of a Professional Medicaid Planner.