Florida Medicaid Burial Rules: Burial Funds, Life Insurance and Preneed Contracts

Florida Medicaid burial rules decide how much of your savings, life insurance and funeral planning can be set aside when you apply for nursing home care or other long-term care Medicaid. Florida is more generous than the federal baseline in two ways: it lets each person set aside $2,500 for burial, and it does not shrink that amount when you also own an irrevocable funeral contract. This guide explains the Florida Medicaid burial rules using the Department of Children and Families (DCF) policy manual and Florida statutes.

This is general information, not legal advice. Long-term care Medicaid has strict timing and transfer rules. Before you cash in a policy, sign a preneed contract or move money, talk with a Florida elder law attorney. For your own case, DCF and your attorney have the final word.

Florida Medicaid burial rules start with the asset limit

Every burial exclusion matters because of the asset limit. DCF’s ESS Program Policy Manual, passage 1640.0205, lists the limits for SSI-related Medicaid groups:

Figures are from the Florida DCF ESS Program Policy Manual as read on October 15, 2026, and are shown for illustration only. They are not quotes or offers, and they can change. Confirm current numbers with DCF or a licensed agent.

The Florida Medicaid burial rules below matter most when you are close to that line. A married applicant whose spouse stays at home is also subject to the community spouse resource allowance rules, which this page does not cover.

How Florida Medicaid life insurance is counted

Florida Medicaid life insurance rules count only the cash surrender value of a policy, never the death benefit. Passage 1640.0554 and Rule 65A-1.712(2)(c) set a $2,500 face-value test:

• $2,500 or less in total face value on one person: none of the cash value counts.
• More than $2,500 in total face value: the cash surrender value of all those policies counts toward the asset limit.
• Policies with no cash value, such as term or burial insurance, are left out of the face-value total and out of every calculation.

Two details matter. The $2,500 applies to each person separately, so one spouse cannot carry $5,000 of coverage on the theory that the couple gets $5,000 combined. And if the cash value pushes you over the limit, the manual says you may adjust your holdings to policies with a lower face value, and DCF will then look at them again.

The federal SSI rule uses $1,500 as its face-value line. The $2,500 Florida Medicaid life insurance test is the one DCF applies.

The Florida Medicaid burial fund: $2,500 per person

Under passage 1640.0514 and Rule 65A-1.712(2)(d), an applicant and spouse may each set aside up to $2,500 as a Florida Medicaid burial fund. Key points:

• Your statement is enough. DCF accepts your word on the amount, whose burial it is for, and the form it is held in. Form CF-ES 2302 can be used to designate the money.
• Keep it separate. The money must not be mixed with non-burial money. If you say only part of an account is for burial, you must open a separate account. If you say the whole account is for burial, DCF excludes $2,500 and counts the rest.
• Ten days to fix commingling. If funds are mixed at application, you have 10 days to show they have been separated.
• Retroactive months count. You may designate funds for any month, including the three months before you apply.
• Growth is excluded. Interest left to build up in an excluded burial fund is not counted.

The most useful of the Florida Medicaid burial rules is this one: “The $2,500 limit is not reduced by the value of excluded life insurance policies or irrevocable burial contract” (passage 1640.0514). Under federal SSI rules, 20 CFR 416.1231(b)(5), the $1,500 federal burial fund is reduced by both. Florida does not do that.

How a Florida preneed contract is treated

A prepaid burial contract is an agreement where you pay in advance and the seller agrees to provide the funeral. Passage 1640.0509 says the contract is not counted as an asset if it is irrevocable, if it cannot be liquidated without significant hardship, or if the seller refuses to revoke it. The manual sets no dollar cap on an irrevocable Florida preneed contract.

State law gives Medicaid applicants a specific way to get there. Under section 497.459(6)(a), Florida Statutes:

• Preneed contracts are generally cancelable, but a purchaser who is the contract beneficiary and a qualified applicant for or recipient of SSI, temporary cash assistance or Medicaid may make the contract irrevocable.
• Once irrevocable, the contract cannot be canceled during the life or after the death of the purchaser or beneficiary.
• Money left over after the funeral goes to the Agency for Health Care Administration’s Medical Care Trust Fund, not to your heirs.

If a contract stays revocable, DCF counts what you would get back on cancellation, minus penalties (passage 1640.0511.02). That refund amount can differ from the contract’s face value.

Burial trusts follow the same logic. A trust set up with a funeral home or funeral director is treated like an irrevocable contract. A trust that is not tied to a funeral provider is treated as a transfer of assets, and only $2,500 of it can be excluded (passage 1640.0512). Placing funds in a burial trust with a funeral director is treated as a purchase, not a gift (passage 1640.0609.05).

Burial spaces Florida excludes

Burial spaces sit outside the Florida Medicaid burial fund. Passages 1640.0515 and 1640.0516 exclude them with no dollar limit when they are meant for you, your spouse or your immediate family. Burial spaces include grave sites, crypts, mausoleums and urns. Under the Florida Medicaid burial rules, caskets, headstones and the cost of opening and closing the grave are also excludable.

“Immediate family” covers minor and adult children, stepchildren, adopted children, brothers, sisters, parents, adoptive parents and the spouses of those relatives. They do not need to live with you or depend on you. A space meant for someone outside that circle counts as an asset if the deed lets you sell it.

Hypothetical example: Florida Medicaid burial rules in practice

Hypothetical example. Maria is 81, single, and applying for nursing home Medicaid through ICP. Her income is above the MEDS-AD limit, so her asset limit is $2,000. She owns:

• A checking account with $1,600.
• A separate savings account with $2,500 that she says is for her burial.
• A small whole life policy: $6,000 face value, $3,200 cash surrender value.
• A $9,000 Florida preneed contract that she made irrevocable under section 497.459(6)(a).

Step 1, the funeral contract. It is irrevocable, so it is not counted. Because of passage 1640.0514, it does not reduce her $2,500 burial fund either.

Step 2, the life insurance. Face value is $6,000, which is more than $2,500. The $3,200 cash value counts.

Step 3, the burial fund. The $2,500 savings account is separate and designated, so all $2,500 is excluded.

Step 4, total. $1,600 + $3,200 = $4,800 countable. That is $4,800 − $2,000 = $2,800 over the limit.

Why Florida’s rule helped. Under the federal SSI method (20 CFR 416.1231, federal), the $9,000 irrevocable contract would use up the $1,500 federal burial fund. The full $2,500 savings would then count, and Maria would be $5,300 over instead of $2,800.

One possible fix. Suppose that, with an attorney’s help, Maria cashed in the policy for $3,200 and spent $2,900 at fair value on excluded burial items not already in her contract, such as a headstone and the grave opening. Her countable assets would be $1,600 checking + $300 left over = $1,900, under $2,000. She would lose the $6,000 death benefit, so this is a trade-off, not a free win. Real cases turn on the facts, so treat this as an illustration only.

Florida estate recovery basics

Burial planning and estate recovery are linked, because what is left after death may be claimed. Under section 409.9101, Florida Statutes, the Medicaid Estate Recovery Act:

• Medical assistance paid after age 55 creates a debt against the estate. Payments made before 55 do not.
• The Agency for Health Care Administration files a claim in the probate proceeding.
• The debt is not enforced if the person leaves a surviving spouse, a child under 21, or a child who is blind or permanently and totally disabled.
• No recovery is made against exempt property, and protected homestead is not sold to pay the claim.
• Recovery is not made if it would cause undue hardship for qualified heirs. Losing an expected inheritance alone is not a hardship.

Leftover money in an irrevocable preneed contract goes to the Medical Care Trust Fund under section 497.459. Ask your attorney how a Florida preneed contract and your life insurance beneficiary choices fit with the probate claim.

Checklist: Florida Medicaid burial rules

1. List every life policy you and your spouse own, with face value, cash value, owner and insured.
2. Add up face value per person, leaving out term and burial-only policies. Compare it with $2,500.
3. Decide what to designate as your $2,500 Florida Medicaid burial fund, and keep it in its own account.
4. If you have a preneed contract, ask the seller in writing whether it is revocable and what the refund value is.
5. Ask your attorney whether to make it irrevocable under section 497.459(6)(a).
6. Keep deeds or contracts for grave sites, crypts, headstones and caskets.
7. Do not give away money or a policy before checking the 60-month look-back (passage 1640.0608).
8. Review every beneficiary form and keep copies of all designations.

Florida Medicaid burial rules: frequently asked questions

How much can I set aside for burial under Florida Medicaid?

The Florida Medicaid burial fund is up to $2,500 for you and $2,500 for your spouse, under Rule 65A-1.712(2)(d). The money must be separately identifiable. Burial spaces and an irrevocable funeral contract are excluded on top of that and do not reduce the $2,500.

Does Florida Medicaid count my life insurance?

Under the Florida Medicaid life insurance rule, only the cash surrender value counts, and only if the total face value of cash-value policies on one person is more than $2,500. Term and burial insurance with no cash value are left out completely.

Is there a cap on an irrevocable funeral contract in Florida?

The DCF manual sets no dollar cap. Section 497.459 lets a Medicaid applicant make a preneed contract irrevocable. Any money left after the funeral goes to the state’s Medical Care Trust Fund, so price the contract to match the funeral you want.

Can I cancel a Florida preneed contract after making it irrevocable?

No. Under section 497.459(6)(a), an irrevocable contract cannot be canceled during the life or after the death of the purchaser or beneficiary. Make that choice only after your attorney reviews the contract.

Does Florida recover from everyone’s estate?

No. Section 409.9101 applies to Medicaid received after age 55. Recovery is not enforced when there is a surviving spouse, a child under 21, or a blind or disabled child, and hardship waivers are available.

Who decides whether my burial assets are excluded?

DCF applies the Florida Medicaid burial rules and decides eligibility. A Florida elder law attorney can review your contracts and policies before you apply. A licensed agent can help with coverage questions, and our Florida life insurance guide covers the state’s general policy rules.

How Octans can help

Octans is an independent agency based in Massachusetts. Our licensed agents compare final expense insurance and burial insurance options from more than 120 carriers and explain how each policy type fits the Florida Medicaid life insurance rules above. You can estimate funeral costs with our funeral cost calculator or read our guide to life insurance for seniors. We are not attorneys, so we will ask you to confirm the Medicaid effect with your elder law attorney before you buy. Call (617) 935-9220.

Keep Reading: Related Guides

• Life insurance in Florida
• Final expense insurance
• Burial insurance
• Funeral cost calculator
• Medicare Advantage plans in Florida (2027)
• Free Medicare help in Florida
• Unclaimed life insurance in Florida

Important: Octans Insurance agents are licensed in the states in which they operate. Coverage availability and rates may vary by state. Premium examples, when provided, are illustrative samples from published sources, not quotes. Final rates are determined by the insurance carrier based on underwriting and applicable policy criteria. Policy terms, exclusions, limitations, riders, and availability vary by carrier and state.

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