Island Gazette

The Survivor’s Guide: Should You Pay for Your Funeral in Advance?

Pitfalls of prepaid funerals include: The merchandise, i.e. casket selected is no longer available and the purchase of another may be more expensive; moving to another state, and the funeral home determines that the prepaid money cannot be transferred to another funeral home; plans change from burial to cremation, but the plan cannot be changed under the terms that the plan was purchased. Perhaps the funeral home is no longer in existence, and only a partial or no credit for the funeral expenses may be provided by a new funeral home.  One way to ensure there is money available to pay for the funeral is to set up a “payable-on-death” account (POD) with your bank. List the person who will be handling your funeral arrangements as the beneficiary.
Give the beneficiary a detailed listing of your plans so that your wishes can be carried out. This way, you maintain control of your money while you are alive.
When you die, the money is immediately released to the beneficiary rather than being tied up in probate.  The account known as a “Totten” trust remains in your name, they are portable, and interest accrues in the account. Itemized pre-paid funeral arrangements enable you to control and maintain the cost of your funeral arrangements. Paperwork completed ahead of time will help reduce stress and ensure your wishes are carried out. Pre-planning can be a valuable tool if Medicaid planning for long-term care becomes a necessity. Details such as pallbearers, memorial donations to certain organizations and officials to conduct the service can be tentatively arranged and   updated when making final preparations. The “Funeral Rule”, enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices and other information about their goods and services, i.e., descriptions of the available selections of specific merchandise and costs. Many funeral providers offer various "packages" of commonly selected goods and services that make up a funeral. In summary, issues to consider prior to purchase include:  What are you are paying for? Are you buying only merchandise, such as a casket and/or vault, or are you purchasing funeral services as well? What happens to the interest income on money that is prepaid and put into a trust account? 
Are you protected if the firm you dealt with goes out of business?  Can you cancel the contract and get a full refund if you change your mind? Do you have to make arrangements with two funeral homes if you are residing in one state and want to be transported and buried in another State?  From the office of: Sharon A. Hatton Law Office P.C., 321 N. Front St., Wilmington, NC 28401 Tel: 910-772-9455, Send questions to  IslandGazette


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