Medicaid Burial Plans in Florida: Protecting Funeral Funds from Spend-Down

When you're spending down your parent's assets to meet Florida Medicaid's strict $2,000 countable asset limit, one of the first questions is: what happens to the money set aside for their funeral? The answer depends entirely on how the burial plan is structured.

The Exempt Burial Plan Rule

Florida Medicaid exempts irrevocable prepaid burial contracts from the countable asset calculation. That means your parent can prepay their funeral expenses — casket, plot, burial vault, transportation, embalming, ceremony costs — and that money doesn't count toward the $2,000 asset limit.

The key word is irrevocable. A revocable burial plan (one your parent can cancel and get the money back) is a countable asset. An irrevocable plan locks the funds with the funeral provider permanently, which is exactly what makes it invisible to Medicaid's asset test.

How Much Can Be Set Aside

Florida doesn't impose a hard dollar cap on the value of an irrevocable prepaid burial contract, but the contract must be for actual funeral goods and services — not a savings vehicle dressed up as a burial plan. If an irrevocable contract covers $25,000 worth of funeral services including a premium casket, engraved headstone, and cemetery plot, that's legitimate. If it's $50,000 with vague "future services" language, expect DCF (the Department of Children and Families, which determines Medicaid financial eligibility) to scrutinize it.

In addition to the irrevocable contract, Florida Medicaid allows up to $2,500 in designated burial funds. This is money specifically earmarked for burial-related expenses that aren't covered by the prepaid contract. The funds should be clearly designated and separately identifiable. If they are currently commingled, DCF policy allows the applicant to provide a statement and evidence of separate designation within 10 days; burial funds for prior months may be commingled under the policy. Do not assume that any commingling automatically makes the reserve countable.

Timing and the 60-Month Lookback

Here's where families make costly mistakes. The 60-month lookback still requires DCF to review transactions around the Medicaid application, but buying an irrevocable burial plan for the applicant at fair value is not automatically an uncompensated transfer.

The applicant receives the funeral goods and services, so the purchase is generally not an uncompensated transfer. DCF will review the contract terms and its irrevocability; an out-of-state contract may require a Headquarters determination under DCF policy.

Do not assume that a plan or burial space purchased for another person is automatically a transfer penalty. Florida's burial-space rules can cover qualifying spaces for a spouse and immediate family, and transactions involving a spouse have separate rules. Get DCF or elder-law review before purchasing for someone else.

Practical Steps

Buy early. If your parent has a dementia diagnosis and you're anticipating a Medicaid application in the next 2–5 years, purchasing an irrevocable prepaid burial contract now is one of the simplest and most defensible spend-down moves available.

Use a licensed funeral provider and verify the contract status. Florida's DCF policy does not make an out-of-state contract automatically invalid, but it may require Headquarters to determine whether the contract is irrevocable. Keep the provider's licensing details and the contract documents with the Medicaid records.

Get a detailed, itemized contract. The contract should list every service and product included: casket, vault, cemetery plot, opening/closing of grave, transportation, embalming, ceremony room rental, death certificates. Vague contracts invite DCF questions.

Keep the contract documents accessible. When you file the Medicaid application through DCF ACCESS, you'll need to provide a copy of the irrevocable burial contract as proof that those funds are exempt. The Medicaid financial eligibility worker will verify the contract's irrevocability directly with the funeral provider.

What About Life Insurance?

A common related question: can your parent's life insurance policy be used for burial expenses while protecting it from Medicaid? Florida Medicaid treats life insurance policies with a face value of $2,500 or less as exempt. Policies with a face value above $2,500 are countable assets — but only the cash surrender value counts, not the face value.

One common strategy: convert a large life insurance policy's cash value into an irrevocable burial trust funded by the policy. This requires careful coordination with both the insurance company and the funeral provider, and an elder law attorney can ensure the conversion is structured correctly.

For a complete asset inventory worksheet, QIT setup guide, and step-by-step Medicaid application instructions — including exactly how burial plans fit into the broader spend-down strategy — see the Florida Dementia & Memory Care Guide.

See more Florida guides →