Preneed Funeral Planning

WHY & HOW

by Abdullah Fatteh, M.D., Ph.D., LL.B.

Every death presents a challenge. Meet these challenges ahead of time: preplan. Increasing numbers of people are doing so, and about 98 percent of the funeral homes in America offer a funeral preplanning option.  Those who do preplan secure peace of mind for themselves and their loved ones.

Preplanning a funeral serves three important purposes. First, it allows you to determine what type of funeral service and disposition you want. You have time to think about the details and to discuss them with your loved ones. This prepares them in advance for handling your funeral. You will have time to purchase a cemetery plot at a location of your choice, as well as to gather funds and pay for the services, plot, and other goods and merchandise. Preplanning eliminates uncertainties and surprises.             The French poet Jean De LaFontaine (1621-1695) wrote, Death never takes the wise man by surprise, He is always ready to go.

Secondly, preplanning a funeral spares your survivors the burden of making last minute decisions. Death brings with it grief, confusion, uncertainty, emotional upheaval and, at times, irrationality. Under these circumstances, it becomes extremely difficult for survivors to make the best decisions. This may result in delays, much worry and unnecessary expenses. If you preplan and prepay, you will be giving your family some financial security and relieving them of any future financial burden. Preplanning eliminates unnecessary difficulties in a time of stress and sorrow. It creates comfort and peace for the survivors and gives them the feeling of satisfaction in carrying out your wishes. We must not forget the words of Herman Hesse (1877-1962):

The call of death is a call of love.  Death can be sweet if we answer it in the affirmative, if we accept it as one of the great eternal forms of life and transformation.

Finally, the pre-selection of a funeral home eliminates efforts to search for one at the last minute. The funeral home will know what to do at the time of your death, and your family will know who to deal with and what to expect.

STEPS TO TAKE NOW

If you are interested in preplanning a funeral, you should do the following:

• Research the subject. Call a few local funeral homes for general information. Follow up with visits to some of these with your close relatives to “feel out” the places. Obtain brochures and compare the funeral homes with respect to services, goods and costs.

• Request brochures from your local association of funeral directors, the National Funeral Directors Association (NFDA) and the American Association of Retired Persons (AARP). These brochures contain excellent information on various aspects of preplanning.

• Study the Federal Trade Commission’s (FTC’s) Funeral Rule and obtain FTC brochures on the topics of funerals, caskets and vaults.

• Visit the cemetery of your choice to select the specific location of your grave. If you purchase a lot in the cemetery, the funeral director will prepare a contract.

When preplanning a funeral, your funeral director is going to be the most helpful source of information. Get to know him. Ask him questions.  He has the answers you need to make decisions. He will discuss the options, services and costs, as well as help you to personalize your funeral. He will show you the facilities, the merchandise, and the cemetery. He will set the stage for completing all the arrangements.

Now in the absence of any emotional pressure is the best time to make decisions. It is the time to investigate, shop around, compare and even bargain on prices. This is the time to complete a preplanning agreement with no loopholes. The American Association of Retired Persons recommends that everyone preplan and prepay. They indicate that preneed plans are especially attractive to the elderly. In 1991, the average age of a preneed plan purchaser was over 70 years. Forethought Life Insurance company estimated that one million adults preplanned and prepaid for their funerals in 1990.

A traditional funeral, including the ceremony, transportation of the remains, a casket, and the services provided by the funeral director, usually costs about $3,500. This average amount does not include a cemetery lot, head stone, mausoleum space, or the costs of opening and closing a grave. It may or may not include the cost of a vault, limousines, flowers, obituary notices or an honorarium for the clergy.  For an in-ground burial, add one to two thousand dollars to this price.  When you are making arrangements with a funeral director, insist on clarifying in writing what is and what is not included in the package.

The Federal Trade Commission is the ultimate watch dog. The FTC’s Funeral Rule operates to protect the consumer. It requires that a funeral director provide consumers with itemized price lists, which can then be used to compare costs. This general price list must be in writing, and must contain the cost of each individual funeral item and service offered. Once you have selected the items you want, the funeral director must give you a statement of goods and services selected along with the individual prices of each item.

ADDITIONAL STEPS TO TAKE

Purchasing a Plot

Now and then cemetery lots are advertised to be “on sale,” like any other consumer product. Keep an eye out for such ads as you may end up paying less. Once you decide to buy a cemetery lot and a purchase contract is being prepared, make sure you look it over carefully before you sign. Make sure the care and maintenance of the grave site are provided. The contract should have a description of interment rights, merchandise, and should itemize charges and details of a payment plan, including trusting, refunds and possible cancellation.

Pre-Paying for the Funeral

Before you pre-pay for funeral goods and services, consider the following issues:

• Be sure you know what you are paying for. Are you buying only merchandise, such as a casket and vault, or are you purchasing funeral services as well?

• What happens to the money you have pre-paid? Some states have different requirements concerning the handling of funds paid for pre-arranged funeral services. Check with the NFDA or your local funeral directors association to get clarification of these requirements.

• What happens to the interest income on money that is pre-paid and put into a trust account?

• Are you protected if the firm with which you are doing business should go out of business?

• Can you cancel the contract and get back any money you have prepaid if you should change your mind about the preplanned funeral?

• What if you should move to a different area or if death occurs away from home? Some pre-paid funeral plans can be transferred, but often there is an added cost in doing so.

Keep copies of the pre-payment documents and inform your family about the whereabouts of these documents.

Three of the most commonly used methods are payment from personal accounts, payment through a trust and payment from a life insurance benefit.

Payment from a Personal Account

This is the easiest method. No lawyers are needed. Simply open a savings account in a federally insured bank containing the amount needed to cover the cost of the funeral. This account should be designated as “payable upon death” to the funeral home. Alternatively, you may open a joint account with your next of kin who has the right of survivorship.  Upon your death, this survivor will pay for your funeral.

Payment from a Trust

This method requires prepayment of the funeral costs to the funeral home. The funeral director puts this payment into a trust account. The beneficiary of this trust will be the funeral director and he will receive the funds upon your death. Most funeral homes offer this funding option. If you choose this method, make sure the trust is regulated by your state.

Payment through a Life Insurance Policy

This method requires purchasing a life insurance benefit equal to the cost of the funeral. The benefits are either assigned to the funeral home or the funeral home is named as the beneficiary. When you die, the funeral home collects the benefits of the insurance policy.

The AARP Product Report entitled “Pre-Paying Your Funeral” is an excellent source for additional information on this subject

Prepare an Information Brochure on Yourself

This is one of the most important aspects of preneed funeral planning. Between the finalization of the preneed agreement and your death, a considerable length of time may pass. Many of the details of the arrangement may be forgotten. At the time of your death, your family will be at a loss to understand what was done. Therefore, it is vital that you create a composite document containing all the pertinent information.

This important brochure should include the following:

• Personal information: your name, date and place of birth, current address and Social Security number.

• Names, addresses, telephone numbers of your spouse, previous spouses, children, parents, brothers, sisters, and other relatives.

• Names, addresses and telephone numbers of friends, employers, attorneys, executor of your estate, funeral director and clergy person.

• Information on your education, organizations you belong to, religion, obituary notices and organ donation.

• Details about your veteran status.

• Your wishes regarding disposition of body, funeral home, cemetery, casket, vault, music, flowers, visitation, and donations in your memory.

• Location of your passport, drivers license, real estate papers, insurance policies, checkbooks, passbooks, credit cards, safe deposit box and key and preneed funeral contract.

Tie Up the Loose Ends

After you have researched the preneed funeral plan, made the decisions, signed the preneed contract and prepared the information brochure, it is time to put it all together. Place all the papers in a safe place and tell your next of kin where they are. This is when you will experience personal satisfaction and contentment, knowing that you are giving your family peace of mind.

From At Journey’s End, The Complete Guide to Funerals and Funeral Planning, by Abdullah Fatteh. Copyright © 1999. Excerpted by arrangement with Health Information Press. $14.95. Available in local bookstores or call 800-MED-SHOP or click here.