New York State Funeral Directors Association

New York State mandates that preneed agreements with New York funeral firms MUST BE REVOCABLE, except for Medicaid/SSI applicants or recipients and their family members. This means that all preneed agreements (except when prepared for Medicaid spend-down) may be canceled at any time prior to death and the entire balance, including all accrued interest, may be refunded upon request.

New York State mandates that preneed burial trusts for applicants or recipients of Medicaid/SSI MUST BE IRREVOCABLE. This means that the prearrangement MAY NOT be canceled prior to death. It may, however, be transferred to a different funeral home at any time.

Effective January 1, 2011, New York State law also mandates that all contracts for prefunded funerals for family members executed by applicants for or recipients of Medicaid also be irrevocable. An applicant/recipient of Medicaid/SSI may, under New York State law, set aside funds for funeral trust accounts for immediate family members. Immediate family members include:

  • The applicant/recipient’s spouse
  • Minor and adult children
  • Stepchildren
  • Brothers
  • Sisters
  • Parents
  • Spouses of these individuals

Please note that when the original purchaser (applicant/recipient) passes away, the beneficiary (family member) becomes the new purchaser and taxpayer. At that time, the Social Security number associated with the account will be changed from the original purchaser’s to the beneficiary’s. Aside from being revocable or irrevocable, there are three types of preneed agreements. The following is a description of each:

Non-Guaranteed – indicates that the funeral home does not guarantee that the principal plus interest earned on the trust will be sufficient to pay the total and final cost of the prearranged products and services. In other words, a balance may be due at the end. The funeral home will provide the funeral services and merchandise selected at the cost of those items at the time of the funeral. If the total cost of the funeral exceeds the amount in the trust account, the additional expense will be due.

Full Guarantee – guarantees that the price of the funeral services and merchandise will not exceed the balance of deposits and interest earned in the trust account at the time that the funeral is provided. The funeral home agrees that the principal deposited plus any interest earned on the paid in full account will be sufficient to pay for all final expenses to be provided by both the funeral home AND third party vendors providing cash advance items.

Guaranteed Excluding Cash Advances – guarantees that the price of the funeral home charges only will not exceed the principal deposited plus any interest earned on the paid in full account at the time that the funeral is provided. Outside vendor costs such as cemetery expenses and death certificates are not guaranteed. Please note, interest earned on this type of account should be split proportionately between the funeral home charges and the cash advance charges.