Tag Archives: pre-financing

FTC Fines Funeral Home for Noncompliance with Funeral Rule

A New York funeral home and its funeral director/owner agreed to pay a $32,000 civil penalty to settle Federal Trade Commission charges for violating the agency’s Funeral Rule, which requires funeral providers to provide information consumers need to compare prices and buy only the funeral goods and services they want.

The FTC conducts undercover inspections every year to ensure funeral homes are complying with the Funeral Rule, which gives consumers important rights when making funeral arrangements.  The Rule, issued in 1984, requires funeral homes to provide consumers with itemized price lists at the start of any in-person discussions of funeral arrangements, caskets, and/or outer burial containers.  The Rule also requires funeral homes to provide price information by telephone on request.  It also prohibits funeral homes from requiring consumers to buy any item, such as a casket, as a condition of obtaining any other funeral good or service.

(Source:  ftc.gov)

Live Radio Talk Show

On 12/11/13 I was a guest on Dr. Jeanette Gallagher’s BlogTalk Radio show discussing the need for Funeral Planning education before a death occurs.  We covered many areas including pre-planning, pre-financing, and what consumers should know and understand prior to purchasing funeral and final disposition goods and services.

*****  If you would like to listen to the hour-long program, click here.  *****

 

Reselling Burial Property

With the economy where it is today, some consumers who have purchased burial plots, mausoleum crypts or even cremation niches are trying to sell them. If you are in this category, I suggest trying to sell the property back to the cemetery if it is in a buy back position. You may be offered less money than you paid for the property, but it is an option. Next, try advertising the property in your local newspaper, let the local funeral directors know about your property, seek out burial plot brokers on the web (always make sure these type companies are legitimate) and even look for web sites that advertise this type of property nationally.

This type of real estate is not the easiest piece of property to sell, so plan on seeking out as many areas as possible to help you sell the property. If you are a buyer, always check for the title of the property, making sure the paperwork is in place, and get it verified prior to paying anyone to purchase their property from them, just like any real estate transaction.

Have questions?  Email me at mikeboyd@askthefuneralexpert.com.

Mike

Totten trust

A method of financing a prepaid funeral plan is a Totten trust. A Totten trust is a “payable on death” bank account, naming a beneficiary. This beneficiary could be the funeral home who will provide services upon the owner’s death. The consumer has control over this type of account and can move out of the area or even cancel it without the fear of losing money placed in the account. This account sets aside money for funeral arrangements, so the consumer should discuss this plan with their funeral director, who may allow price protection on certain goods and services, knowing the funeral provider is named as the beneficiary of the account.

I suggest looking up “Totten trust” on the web for a detailed, consumer friendly explanation of this type of account. A Totten trust may only cover the funeral home part of the funeral plan. The final disposition part of a funeral plan including burial plot, mausoleum crypt or cremation niche may be considered extra. Always discuss these areas with your funeral provider, be careful when making these type of arrangements, get everything in writing and included in any contract you are considering signing. Have questions, e-mail me:  mikeboyd@askthefuneralexpert.com

Mike

Pre-Financing a Funeral

Pre-financing (prepaid) funerals require a great deal of investigation and understanding prior to making that type of financial commitment. With the amount of money required for this type of investment, it should be considered as part of your financial portfolio.

There are many things to understand before signing up for this type funeral plan, and please use a great deal of CAUTION!   For example:

What parts of the funeral plan are “price-protected”, or guaranteed to remain at the current contracted price? Items that are not price-protected against inflation may require more money invested into the funeral plan at the time of death, which could be months or years later, as it is a pre-financed plan.

Which items are classified as cash advances which are not price protected (guaranteed)? An example would be the cost of the death notice in a newspaper.

If you move to another area or change your mind and want to cancel the prepaid funeral or final disposition plan, find out how much money will be returned to you if you cancel the plan prior to death, and whether you will earn interest on it. This should be clearly defined in the pre-financed contract, along with how long it will take for you to receive the money back.

What happens to your money if the funeral home, cemetery or mausoleum facility is sold, goes out of business or bankrupt? Investing your money into these type businesses is not like putting money into a savings account at a bank. If the bank fails, your money is generally protected. It may not be so here! The prepaid agreement should clearly define this area so you know how your money is protected.

I will discuss Totten Trusts and how a bank account controlled by the consumer can help pay for funeral arrangements in a future blog.

Consider your options and contact me with questions, or to share your experiences in this area. I’m here to help!     Email mikeboyd@askthefuneralexpert.com.

Funeral Pre-financing Tips

Planning ahead is always a good idea, but if you’re going to consider pre-financing of a funeral, be sure you know which items are guaranteed at today’s prices and which items may increase in price over the years (such as cash advance items). Not everything may be price-guaranteed. Also, if you are going to make a pre-financed funeral arrangement, always know the transfer options in case you move or relocate to another area in the future. If there is not a funeral home in the new area that is a member of the same funeral home chain, what will happen? This should be clearly defined in the contract made with the funeral home.
These subjects and many others are covered in my book, “How to Bankroll a Funeral Without Breaking the Bank”  available at amazon.com, or order directly by clicking on the Buy Now button in the right hand column on this page.

Click on the “Ask a Question” tab to ask your funeral questions, and I will be happy to answer them.

Mike