You can preplan your funeral and/or pay for it in advance. When a loved one dies, making the funeral arrangements becomes the task of those who are left behind. Families can be caught off guard and may have little or no warning. The grief of losing a loved one may make decision making difficult. Pre-arranging and pre-financing is a way to avoid some of the confusion, it is also a way of making your wishes known. Although discussing arrangements with your family may be difficult, it is important because it affects those we leave behind most directly. The benefits of pre-planning a funeral can also be financial. You can prepay expenses outright or by installments. A Pre-paid funeral is a good investment because with today's inflation rate moving ever upward, your costs may be guaranteed.
Pre Planning Vs Pre Paying
Pre Planning a Funeral
A person or family can preplan a funeral without funding it. You can discuss your wishes with the funeral director.
When your plan is complete, the funeral director will keep it on file until it is needed.
Your family will then have to pay for the services at the rates being charged when your funeral is held.
The funeral director will provide professional advice.
Pre Paying a Funeral
- Many people choose to prefund their funeral expenses. Once your wishes are expressed then you can contract an agreement with the funeral home. Your money will be held in the name of the funeral home in trust for you.
- You will have the peace of mind that comes with knowing that the money needed for your funeral has been set aside.
- Your survivors will not have to worry about how to pay the bill.
- New York State Law regarding prefunding of funerals is some of the strongest protection for you the consumer in the country.
- Medicaid recipients may set aside funds for their funeral expenses in an irrevocable preneed account which will be excluded as a countable resource.
- They may also set aside funds for specific family members.
Pre Funded Funeral Arrangements
Once you've made your selections, you will contract an agreement with the funeral home. It will include a Pre-Need Itemization Statement that lists the items of merchandise, services and facilities you have chosen, and the price of each.
- You can leave the details of some items open until you have made a final decision, or until you have chosen someone to make these decisions for you.
Pre-Need Agreement that outlines all the terms, as well as your rights as the purchaser. It must also state how the principal and interest will be applied to the cost of your funeral services and merchandise at the time they are provided.
There are two basic types of preneed contracts, revocable and irrevocable.
- A revocable contract is used when the beneficiary has not applied for or received Medicaid/SSI benefits. Revocable contracts are set up for these individuals giving them complete control of their account. They may close it at any time, change funeral homes, change selections on the preneed itemization or request a refund.
- An irrevocable agreement if you are applying for Medicaid, or if you are applying for supplemental security benefits under Section 209 of the Social Services Law. These are the only instances for which an irrevocable preneed agreement may be established. The moneys paid to fund these agreements may not be refunded under any circumstances. Once an irrevocable contract is made the overage, if any, goes directly to the county in which the beneficiary received Medicaid/SSI benefits (in New York State).
Frequently Asked Questions about Prefunding a Funeral
Who holds my money?
- PrePlan - http://www.preplan.org
Who Is Preplan?
- PrePlan is a preneed trust program sponsored by the New York State Funeral Directors Association.
- Serving New York’s consumers since 1988
- Accredited by the Better Business Bureau with A+ rating
- Over 80,000 consumer accounts
- Over $600 million dollars in trust
- 600 member funeral homes
- Audited quarterly and annually by an independent auditing firm
How does PrePlan Protect Your Funds?
- For the security and stability of the monies entrusted to PrePlan, funds are invested into FDIC insured Certificates of Deposit.
- The portfolio of CD’s is strategically diversified among 30 different highly rated banks.
- Investments are overseen by five PrePlan Trustees who are actively engaged in funeral service, with the assistance and expertise of an investment advisory firm.
Can I receive a refund?
- If you have a revocable agreement, you can withdraw the principal and the accrued interest at any time.
Will I receive any type of interest statements?
- Once an account is opened you will receive an initial statement. In January of each year, you will receive an annual interest statement.