§ 178.5. Treatment of irrevocable burial reserves for all categories of MA.

 Irrevocable burial reserves are considered as follows:

   (1)  To be considered irrevocable, the burial reserve funds shall be deposited with a financial institution or a funeral director under a written agreement which provides that the funds cannot be withdrawn before the death of the named beneficiary.

   (2)  Interest earned on the burial reserve is counted as income if it can be and is withdrawn before the death of the applicant/recipient.

   (3)  If a burial reserve is in an irrevocable form, it is not a countable resource. For the aged, blind and disabled categories of MA it shall be considered under §  178.73(2)(ii) (relating to revocable burial reserve).

   (4)  Excess funds remaining from the irrevocable burial reserve after the burial expenses become a part of the deceased recipient’s estate.

   (5)  The resource that was used to establish the irrevocable burial reserve, usually cash, is not excluded. The transaction establishing the irrevocable burial reserve shall be reviewed to determine if the disposition of property and fair consideration requirements at §  178.101 or §  178.171 (relating to disposition of property and fair consideration provisions for transfers during the period of January 4, 1991, through July 29, 1994) or the requirements in §  178.104 or §  178.174 (relating to the disposition of assets and fair consideration provisions for transfers on or after July 30, 1994) are met.

     (i)   Fair consideration is established if the irrevocable burial reserve is not exorbitant in relation to the average cost of burial in the locality where the person lives. To allow for future increases in the cost of burial, an irrevocable burial reserve is not considered exorbitant if it does not exceed the average local costs by more than 25%.

     (ii)   Fair consideration for amounts above those in subparagraph (i) shall be documented, and if determined by the Department to be reasonable, the creation of the irrevocable burial reserve may meet the fair consideration requirements. The documentation shall demonstrate that the amount is not exorbitant for the person’s situation and the higher amount is needed for things such as:

       (A)   The cost of transport of the body because burial is to be in a community many miles away.

       (B)   The person arranged for a priest, minister or rabbi who is a close friend or relative and lives some miles away to conduct the memorial services with the cost of travel, food, lodging and honorarium to be paid from the irrevocable burial reserve.

       (C)   Arrangements include a reasonable gift to the church or synagogue for the use of the facilities for the services.

     (iii)   If fair consideration is not established, the difference between the cost of the burial arrangements and the amount of the burial reserve and if applicable, the 25% factor in subparagraph (i), shall be counted as UV in accordance with §  178.101(h) and §  178.104(d) for the SSI-related categories or §  178.171(h) and §  178.174(d) for the AFDC-related/GA-related categories. If the application of the transfer of resources requirements at §  178.101, 178.104, 178.171 or 178.174 to an irrevocable burial reserve creates ineligibility, the person who created the irrevocable burial reserve or trust may be able to reform or revoke the reserve or trust.

Authority

   The provisions of this §  178.5 amended under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

Source

   The provisions of this §  178.5 amended December 23, 1994, effective December 24, 1994, and apply retroactively to January 4, 1991, 24 Pa.B. 6423. Immediately preceding text appears at serial page (171799).

Cross References

   This section cited in 55 Pa. Code §  178.72 (relating to irrevocable burial reserve); and 55 Pa. Code §  178.161 (relating to personal property exclusions).



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