To make an informed choice when you prearrange your funeral, you need to know five things:
- What you want
- How much you can afford to pay
- If guarantees are provided on merchandise and services
- What happens if you move and want to change funeral homes
- The tax consequence of the funding arrangements, if any, and if you are protected against inflation
Prepaid Funeral Agreements
Generally, funeral plans consist of a two step process: making the funeral arrangements (pre-need funeral contract) and second, funding the cost of the prearranged funeral through life insurance, bank trust agreement or other method. It is possible to select funeral goods and services without pre-funding the funeral or to pre-fund a funeral without selecting specific goods and services. If you do either of these, you should be aware that the price of the funeral will usually not be guaranteed.
The preneed funeral contract should identify the person selling the contract, the person purchasing the contract, and the person for whom the contract is purchased, if the arrangement is for someone else. In several states, only funeral directors may prearrange your funeral. You should check your state law and the credentials of the person selling the preneed funeral contract. If the person selling the contract is not with a funeral home, you should ask to see a copy of the agreement between the seller and the funeral home which you want to conduct your funeral.
The contract should contain a complete description of the merchandise and services purchased, and disclose the current price of the merchandise and services. If a unique service is requested, you should discuss this in detail with the funeral service professional to determine if the service can be provided.
Funeral service selections fall into two general categories; the services of a funeral professional and funeral merchandise.
Funeral Service Selections usually include:
- Professional services of a funeral director and staff.
- Transportation services.
- Embalming and other preparation.
- Facilities for visitation.
- The funeral ceremony.
- Funeral vehicles.
- Other services and associated items (pastoral services, music, grave opening and closing).
Funeral Merchandise Selections include:
- Casket, urn or both.
- An outer burial container (cemetery vault or other selection).
- Other merchandise and associated items such as flowers, acknowledgment cards, and transfer containers.
The funeral home is required by law to give you a general price list which contains the current cost of each individual item and service offered. It must also contain information on embalming, cash advance sales, containers for cremation and any required purchases. Cash advance items are goods and services that are paid by the funeral provider on your behalf, such as a cemetery plot, flowers, obituary notices, pallbearers, and clergy honoraria. Some funeral providers charge you their cost for these items while others add a service fee to their cost. If a service fee is added, or if the funeral provider receives a discount, refund or rebate for these items, he must disclose this fact to you.
You may, of course, choose any or all of those items you prefer. A funeral planning professional will be able and willing to help you with each of these steps.
The contract should clearly state whether the provision of the supplies and services is guaranteed or not guaranteed. A guaranteed funeral means that regardless of the retail price of the funeral at the time of death, there would be no obligation to pay additional money to the funeral provider. The guarantee may be limited if installment payments are selected as a method of payment.
The agreement should also state that goods and services of equal value will be substituted if the exact ones are not available at the time of need, at no extra cost.
It should also clearly identify any items or services which are required and explain why. An example would be embalming, which may be required if there is a viewing planned or for other reasons. Furthermore, a casket may not be required for direct cremations, and a vault may not be required in all instances. If you are considering the purchase and storage of a casket or other merchandise, you should consider factors such as the risk of loss, impact upon manufacturer warranties, and whether the funeral home selected will agree to accept the merchandise for use.
The contract should disclose any penalty or restriction, including geographic restriction, on the funeral homes’ ability to perform.
Cemetery arrangements should be discussed well in advance, too. Some questions you should ask when deciding on a plot are:
- Does the plot meet the requirements of your religion?
- What restrictions are placed on the types of monuments and burial vaults?
- Does the price include perpetual care and maintenance?
- Are there other plots available in the same location to provide for the burial of the entire family?
This information courtesy of the National Institute on Aging, National Institutes of Health