Medicare and Funeral Expenses

Steven Mott by Steven Mott | Licensed since 2012
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This article was updated on: 09/10/2018

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Are you planning ahead and need to know if you can deduct funeral expenses from your taxes? Funeral expenses, burial expenses, and death benefits aren’t typically part of Medicare coverage. However, there’s a type of Medicare Advantage plan called a Medicare Medical Savings Account (MSA) that you may be able to set up to help pay for your funeral expenses.

Can you get Social Security burial assistance to help pay funeral expenses?

Some people turn to the government to see if they can get Social Security burial assistance. In some states, if you qualify for Supplemental Security Income, you might be able to set aside a limited amount of money for funeral expenses. This is not the same as receiving assistance in the form of money. Instead, when Social Security looks at how much money you have to see if you qualify for assistance, it might not count the money you may have set aside for funeral expenses (up to $1500 for you and $1500 for your spouse, in 2017).

In other words, suppose you have $3000 in the bank, and you apply for SSI assistance (which might include monthly payments to you so you can pay basic living expenses). You need to have less than a certain amount of money to qualify for SSI. In some states, Social Security may let you keep $1500 for funeral expenses, and not count it towards the money and other assets you have.

How do you set money aside for your funeral expenses?

Medicare doesn’t have a program that lets you set up a burial account, but there might be a way to leave money for your loved ones that they might be able to use for your funeral expenses. Medicare Medical Savings Accounts are available through private health insurers who contract with Medicare. The Medical Savings Account plan will set you up with a medical savings account you can use to pay your health-care costs. These high-deductible plans let you designate a beneficiary. Depending on when the funds were deposited into your account, a portion of them may go to your beneficiary when you die.

If you enroll in a Medical Savings Account plan, you can ask your beneficiary to use any available leftover funds to pay for your funeral expenses.

To help pay for a loved one’s funeral expenses, you might also want to check into any survivor benefits from any of these agencies as appropriate:

Can you deduct funeral expenses from taxes?

You might be able to set up a bank account that the IRS (Internal Revenue Service) calls a “qualified funeral trust.” You can ask a qualified tax preparer or attorney for details.

There are many types of Medicare plan options; some of them may help you reduce health-care costs so that you can set aside more money for your funeral expenses. If you’d like me to help you find a suitable Medicare plan option, I invite you to start by reviewing my profile–just click on the “View profile” link below. You can schedule a call with me, or I can email you information about Medicare plans, if you follow one of the links below. Anytime you like, you can click the Compare Plans buttons on this page to start looking at plans.

This article is only for general information and is not tax or legal advice.  Consult your tax or legal advisor for guidance.

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