Prepaid Funeral Plans and Medicaid When You Have No Heirs

A prepaid funeral is a legal way to spend money down for Medicaid. With no heirs, the real question is who makes sure you get the funeral. Our funeral checklist and other end-of-life guides cover the rest of the plan.

How much you can put in a Medicaid funeral plan, by state (as of 2026)

Federal rules say an irrevocable contract isn't a resource, but "State law determines whether a contract is revocable." Any amount above your state's cap becomes revocable and counts against you. Social Security's own rule on prepaid burial contracts sets this out, and most states follow it for Medicaid.

State	Irrevocable cap	What to know
California	No dollar cap in the Medi-Cal rule	Irrevocable funeral trusts are exempt. A separate trust law points to an $1,800 limit for some aid recipients, and how it applies is unsettled
Pennsylvania	Average local funeral cost plus 25%	A reasonableness test, not a fixed number
Illinois	$8,434 from Jan 1, 2026	No cap for a guaranteed-price contract funded by life insurance assigned to a trust
Ohio	No dollar cap	"Irrevocable prepaid burial contracts are not a resource," but the burial-funds part uses up your $1,500 burial allowance
Georgia	Irrevocable not recognized	Counts inside a $10,000 or $1,500 burial exclusion, depending on your Medicaid category
North Carolina	No dollar cap	The purchase is an allowable transfer only if the contract lists "each burial item and/or service"
Michigan	$16,100 from June 1, 2026	Only guaranteed-price contracts qualify
Wisconsin	$4,500	Life-insurance-funded contracts can go higher
Minnesota	$2,000 per person, $3,000 per couple	Above that is counted
Connecticut	$10,000	The state gets any leftover money
Kansas	$10,000 base (2021), raised each July 1 for inflation	Ask your Medicaid office for this year's figure
Nebraska	$6,696 from Sept 1, 2025	Check for a newer figure each September

Georgia's manual says all burial contracts bought there are revocable "by state law." So the word "irrevocable" on a Georgia contract doesn't make it irrevocable for Georgia Medicaid.

These states set no dollar cap: Florida, New York, Texas, Massachusetts and New Jersey. Washington allows any amount "reasonably related" to expected costs. Iowa has no fixed cap but asks for a goods-and-services statement above the state's average funeral cost.

We confirmed these in state manuals, statutes and decisions in Oct 2026. We didn't check other states, and secondary websites list figures that the states' own documents don't support.

How the plan counts toward Medicaid's $1,500 burial fund

Medicaid lets you set aside up to $1,500 in a burial fund (money for funeral costs that isn't counted as an asset). An irrevocable contract shrinks that allowance.

The contract splits into two parts. Burial-space items (plot, casket, vault, opening and closing the grave) don't touch the $1,500. Everything else, like the funeral home's services, uses it up dollar for dollar.

So a contract heavy on services can wipe out your separate burial fund. A contract with a plot and casket in it leaves more room. Florida is different: it keeps a separate $2,500 burial fund that the contract doesn't reduce.

Where the leftover money goes when you have no heirs

Funerals rarely cost exactly what the contract holds. Here's where the difference goes in the states we confirmed.

State	Where the leftover goes
California	No statute names who gets it. With no heirs, your estate goes to the state
Florida	The state's Medical Care Trust Fund, on irrevocable contracts
New York	The county's indigent burial fund (money for burials of people who can't pay)
Pennsylvania	Your estate
Illinois	The state, up to total Medicaid paid, on life-insurance-funded trusts
Ohio	Guaranteed-price contract: the funeral seller keeps it. Otherwise: your estate or the named insurance beneficiary
North Carolina	Your estate or the named insurance beneficiary. Under an "inflation-proof" contract, the seller keeps it
New Jersey	The state, which the contract must name as beneficiary
Connecticut	The state, up to what Medicaid can recover, paid within 60 days
Iowa	On nonguaranteed trusts and insurance-funded plans, the state gets 60 days to claim what Medicaid is owed

New York's contract has to say it in capitals: "IF ANY MONEY IS LEFT OVER ... IT WILL GO TO THE COUNTY." At least nobody can say they weren't told.

Where it lands in your estate, estate recovery comes next. Federal law requires states to recover long-term care costs from anyone who got that care at 55 or older. Recovery pauses only for a surviving spouse, a child under 21, or a blind or disabled child.

That rule fails people on their own. Federal law has no pause for a friend or neighbor.

With none of those relatives, recovery applies in full. Anything left after that, with no will and no heirs, escheats (passes to the state).

We didn't confirm where the leftover goes in other states.

Buy the funeral, not a cushion

I'd size the contract to the funeral you actually want, itemized. Extra money doesn't come back to anyone you choose. It goes to the state or county.

That changes the math. With no heir, any cushion is a gift to the government.

What to ask for in the contract

Get the answers in writing before you sign.

• Irrevocable, if you're applying for Medicaid in a state that recognizes it.
• A guaranteed price, so the funeral home can't come back for more. Michigan accepts only guaranteed-price contracts.
• Itemized goods and services, line by line, so your agent can check each one.
• Trust or insurance funding, and which one this is.
• Who gets any leftover money, named in the contract.
• Whether the money can move to another funeral home if you move.

The Federal Trade Commission's Funeral Rule backs you up here. The home must give you its General Price List (its printed list of prices) when you discuss arrangements.

It must answer price questions by phone, and you don't have to give your name. It must itemize what you choose. For direct cremation, it can't make you buy a casket.

Who makes sure the money buys your funeral

Name a funeral agent: the person with legal authority over your body and funeral. In New York this is done on a statutory appointment form.

Without it, a close friend ranks low on the default list. See who decides, by state.

Name an executor too (the person who settles your estate). Give each a copy of the contract, and tell the funeral home who they are.

Asking a friend feels like a big favor. It's smaller than it sounds: you're asking them to make sure a bill matches a list.

In New York, you or your representative can move an irrevocable contract to another funeral firm. The move must happen within 10 business days of asking, under New York's prepaid funeral law. In California, the funeral home must show the contract to whoever is handling the funeral.

If you move to another state

Your contract was written for one state's rules. The new state may read it differently.

Minnesota honors another state's irrevocable contract only up to that state's own cap. Georgia treats every contract as revocable.

A Texas trust contract can't be transferred, though its cancellation value can be assigned to a new funeral home. The new home doesn't have to honor the old price.

Can you cancel a Medicaid funeral plan later?

Generally, no. In New York, Florida and California, nobody can cancel an irrevocable contract bought for Medicaid or SSI (Supplemental Security Income). California allows irrevocable trusts only for those programs.

New York lets you change funeral firms, but there's never a refund. For plans that aren't tied to Medicaid, see canceling a prepaid plan.

Who to check with before you sign

Rules differ by state and change often. Your state Medicaid office's manual or an elder-law attorney can confirm what counts for your case. In New Jersey, the state's Medicaid notice on funeral and burial expenses spells out the beneficiary rule to show a funeral home.

If you aren't heading toward Medicaid, prepaying may not help you. The Funeral Consumers Alliance advises planning without paying ahead unless you're spending down for Medicaid. I'd start there: pre-planning without prepaying.

Canada has no Medicaid asset test like this. For Canadian prepaid plans, see how to cancel a prepaid funeral or get a refund.

What to set up next

• Name a funeral agent: the person who checks that the contract is honored.
• Prepaid plans: who tells the funeral home you died.
• Canceling a prepaid plan: refund rules for plans that aren't Medicaid plans.
• Paying for a funeral: the fallback if the plan doesn't cover everything.