Prepaid funeral plans are the “extended service warranties” of the funeral industry—profitable for the funeral home but often useless. The Houston Chronicle has a sad story of a woman who pre-paid for her funeral so that her children wouldn’t have to deal with any financial matters—but after she died, the funeral home told the kids “their mother had not paid her bill in full. They would have to pay $5,170, about what Ferguson originally contracted for the arrangements.”
Some consumer groups and the retirees organization AARP recommend against prepaying. They say that funeral homes, particularly those that have changed hands, do not always honor prepaid contracts or the agreed-upon prices.
“We advise consumers to preplan, but not to prepay,” said AARP Texas spokesman Rafael Ayuso. “And this is largely because pre-need/prepaid contracts can leave many important questions unanswered and the industry is rife with deceptive sales practices and, in many cases, outright fraud.”
We suggest you set aside some of your savings to cover the cost, and arrange to make that money legally available to designated loved ones who you trust to carry out your wishes. Sure, not every funeral home is going to try to screw over a grieving family with tacked-on fees—but this is the one big event where you shouldn’t leave yourself or your loved ones unnecessarily open to fraud or fee gouging.