By Jo Pettit
Show me the manner in which a nation or a community cares for its dead and I will measure with mathematical exactness the tender mercy of its people, their respect for the laws of the land and their loyalty to high ideals.
-William Gladstone (1809-1898)
Why do so many people pre-plan and/or pre-fund their own funerals?
Many people decide to pre-plan their funerals as part of their estate planning in order to relieve the burden to their grieving survivors, to gain peace of mind and, in many cases, as Medicaid or SSI "spend down."
Often, discussing one's desires for one's own disposition is difficult. Sometimes children, even spouses, refuse to listen. And sometimes, for any number of reasons, an individual is simply uncomfortable talking about death to a non-professional.
When a funeral is preplanned, the person takes the opportunity to make personal selections and express his/her wishes. He or she also saves survivors from the task of making quick decisions or guessing what their loved one wanted.
When a person establishes a pre-need trust account and is, or later becomes, an SSI/Medicaid client, the money is set aside to totally fund their funeral service and burial. The money in the fund is no longer considered an asset and does not count towards establishing or maintaining an eligibility level.
100% of the principal and interest is trusted* and must be deposited in a government-backed investment. By the way, the strictest funeral pre-need laws in the nation are those of New York State.
*less a third party Trustee administrative fee established by law
NY State Mandates:
A "Revocable" pre-need account from a funeral home in New York is mandated for all except SSI/Medicaid recipients. A revocable account is one that may be cancelled at any time and the money in the account plus all interest must be refunded within ten days.
By law, applicants or recipients of SSI/Medicaid must have Irrevocable accounts. The accounts may not be cancelled but may be transferred to another funeral home.
You may purchase either a "Guaranteed" or a "Non-Guaranteed" agreement. A guaranteed pre-need agreement means that the cost of the funeral services and merchandise will not exceed the balance in your account at the time of the funeral. A non-guaranteed pre-need agreement means that the funeral home will provide the funeral and merchandise that you selected at whatever those items cost at the time of the funeral and the cost over the amount of the account will be due. However, if the total cost is less than the balance of the account, the excess funds will be refunded to your estate.
One more thing. In the case of an SSI/Medicaid account, if the cost of the funeral is less than the balance in the account, the excess money must be refunded to the county Social Services Department.
How to Pre-Plan a Funeral:
Call the NYS Licensed Funeral Director of your choice and arrange to get together. Before discussion even begins, the funeral director will give you a General Price List of their merchandise, services and facilities.
Discuss all the options you have regarding your funeral and burial and choose the items you want.
The funeral director then will give you an itemized statement and a pre-need agreement for both of you to sign.
You will give the funeral director a check made payable to the funeral home or a funeral trust fund. (If you pay with cash, you will receive a cash receipt then and there.) The funeral director will give you copies of all signed documents and the General Price List for your personal files.
Your payment will be deposited into a funeral trust program or an interest bearing, government-backed account within ten days. Within 30 days you will receive by mail a deposit acknowledgement.
When the funeral takes place, the funds will be paid directly to the funeral home.
Notes & Cautions:
To protect the consumer, New York State Law prohibits the sale of so-called "Funeral/Burial Insurance." ALL pre-arrangement funds must be 100% trusted in qualifying plans/investments.
Funeral pre-arrangements may be totally pre-funded - no items are excluded by law.
Jo Pettit owns Jo Pettit Communications, a firm that provides business writing services, project management and public relations to a variety of clients. For the past 11 years she has been executive director of the Nassau-Suffolk Funeral Directors Association. Also, she is a partner in Millennia Consulting, producer of bereavement materials and services. She is the co-editor and a writer of the "I Can Survive" grief series of brochures available in funeral homes and religious bookstores. Two and a half years ago Jo relocated to "Paradise," Long Island's North Fork, where she tries to work while looking out at Peconic Bay, deer, seagulls and occasionally, a car or jogger.