 |
|
|
|
|
I. Introduction
Many New York residents prearrange and prefund their funerals as part of regular estate planning. In fact, many consumer advocates applaud the concept. Reasons for preplanning one's final expenses include peace of mind, relieving the burden on loved ones, or for purposes of SSI/Medicaid spend down. There are a number of advantages to preplanning and prefunding funeral expenses. The primary advantage is that it allows individuals the opportunity to make personal and specific selections for the fuenral service that most closely meets their needs. For many, it is comforting to know that money has been set aside for their final expenses, which will in turn reduce the burden on family members at a difficult time. In addition, loved ones are not left guessing which type of funeral service would have been preferred. Another very important reason to establish a preneed burial trust is that SSI/Medicaid recipients are allowed to set aside money to fully fund the service of their choice before their funds are exhausted down to necessary eligibility levels.
Consumers in New York State benefit from the strictest, most comprehensive funeral preneed laws in the country. In New York State, 100% of the principal and interest must accrue to the benefit of the trust (less a third party Trustee administrative fee), which must be deposited in an investment backed by the government of the United States. Our firm utilizes this funeral preneed trust program, the PrePlanSM. PrePlanSM is a commingled trust invested solely in FDIC insured certificates of deposit. PrePlanSM currently services 60,000 consumer trust accounts for over 500 funeral firms.
Top
II. The Funeral Prearrangement Conference
Below is a description of what you should expect from a prearrangement conference.
The law requires the funeral director to provide the consumer with the following:
- A General Price List with the current prices for any merchandise, services and facilities offered by the funeral home.
- A Preneed Itemization Statement that lists the items of merchandise, services and facilities that have been chosen, and the price of each.
- A Preneed Agreement that outlines all the terms, as well as a consumer's rights as the Purchaser. It must also state how the principal and itnerest will be applied to the cost of the funeral services and merchandise at the time they are provided.
Top
III. Different types of Preneed Agreements
New York State mandates that prearrangements with New York funeral firms MUST be REVOCABLE, except for SSI/Medicaid recipients. This means that all prearrangements (except when prepared for Medicaid spend down) may be canceled at any time prior to death and the entire balance, including all accrued interest, must be refunded within ten days of the request.
New York State also mandates that preneed burial trusts for applicants ore recipients of SSI/Medicaid MUST be IRREVOCABLE. This means that the prearrangement MAY NOT be canceled prior to death. It may, however, be transferred to a different funeral home at any time.
Aside from being revocable or irrevocable, there are essentially two types of preneed agreements. Following is a description of each:
- GUARANTEED
The funeral home may offer a guaranteed preneed agreement whereby the price of the funeral services and merchandise is guaranteed not to exceed the balance in your trust account at the time that the funeral is provided. The Guarantee will most likely be null and void if withdrawals are made from the trust account and generally will not apply to certain items such as cemetery costs, clergy fees, death certificate fees, etc. Please note, however, that the funeral home may not charge more than the actual cost for these third party items.
- NON-GUARANTEED
A non-guaranteed agreement indicates that the funeral home will provide the funeral services and merchandise selected at the cost of those items at the time of your funeral. If the total cost of the funeral exceeds the amount in the trust account, the additional expense will be due. If the total cost is less than the balance in the account, the excess funds will be refunded (except irrevocable trusts). The cost of the items at the time of your funeral must correspond with the funeral home's printed General Price List at that time.
Top
IV. How Preplanning Works
- Purchaser meets with one of our funeral directors.
- Purchaser selects desired services and merchandise while reviewing our General Price List.
- Funeral director prepares a fully itemized statement and preneed agreement.
- Both the funeral director and Purchaser sign the documents.
- Purchaser submits a check for the cost of the funeral made payable either to Metropolitan Funeral Chapels, Inc. or a funeral trust program. If cash is remitted, the Purchaser will obtain a cash receipt at the time of the transaction.
- Purchaser receives copies of all signed documents and a General Price List for retention.
- Within ten days, the funeral director forwards the funds to a funeral trust program (ie PrePlanSM) or deposits the money directly into a government backed, interest bearing account within a New York financial institution.
- Within 30 days, the Purchaser will receive a deposit acknowledgment in the mail indicating where the money has been placed.
- Funds are paid directly to the funeral director once the funeral services have been provided.
Top
|
|
|
|
|
|
