Pre Need Burial Plans
Today, many seniors are considering pre-need funeral plans. A pre-need funeral
plan is an agreement in which a seller agrees to provide funeral services and merchandise at
the time of the buyer's death. The costs may be paid in installments or in one lump sum.
Although there are many honest and reputable funeral directors who sell pre-need funeral
plans, there also are unscrupulous con artists who will take your money with no intention of
fulfilling their end of the agreement.
How can you be sure a pre-need plan is good?
Know the details of the burial plan
If you have any questions, get answers from the seller before you buy.
Beware of any plan that does not specify exactly what you will receive. The law requires
that pre-need funeral contracts specify in detail the funeral merchandise and services that
are to be provided.
By law funeral directors also must provide written price lists for all merchandise and
services they offer. Shop around. Some plans guarantee a fixed price; others don't.
Know who is selling and honoring the burial plan
Pre-need burial plans may be sold directly by funeral homes or by other companies that
have arranged to have a funeral home in your area service the plan.
Sellers are required by law to have a written contract with the funeral home to ensure there
are arrangements. Ask to see a copy of this contract or check with the funeral home.
Be certain the funeral home designated in the plan is acceptable to you, and your family
knows of its obligation to honor the plan.
State law gives you the right to cancel a pre-need funeral plan at any time unless at the
time of sale you choose to give up that right. You should consider giving up that right only if
you are seeking public assistance. You may wish to consult with a representative of the
public assistance agency.
With the right to cancel, if you default on payments, you are entitled to recover any amount
you paid into the plan, minus the amount the seller is allowed to keep -- the first 20 percent
of the purchase price --usually without interest depending on the contract.
Also remember, pre-need burial plans can be subject to a 30-day right to cancel clause under your state law.
To be sure a prearranged burial plan is best for you, consider other
options such as buying additional insurance or arranging with a mortuary for a certain type
of funeral service without prepayment.
Know where your plan payments are going
By state law, all payments made on a pre-need burial plan, minus the amount the seller is
entitled to keep, must go into a pre-need trust. Those funds generally must be maintained in
that trust until you die.
Make sure your burial plan identifies the pre-need trust into which your payments will be
deposited, including the name and address of the trustee.
You have a right to receive from the seller, upon written request, a written statement of all
deposits made into the trust on your behalf. Making such a request is a good way to
determine that your payments are going into the trust and not into the seller's pocket. You
also may want to contact the trustee directly.