Maybe you want a trip through the drive through as part of your funeral procession, or perhaps you want your mourners to enjoy a nice mocha latte at your wake.
Whatever you want, no one will know about it unless you tell them.
To relieve some of the stress that comes during this emotional time, some people choose to buy pre-paid funeral packages. The not-yet-deceased can lay out their wishes, pick their own caskets and gravesites, or choose cremation, and pay for it all long before they’ve bitten the dust.
Or, that’s what they think. Unfortunately and all too often, relatives learn that the pre-paid packages arranged by their loved one are far from complete, and more cash-ola will be due before the last shovel of dirt is moved.
And with one in five funeral homes violating federal rules about funeral home pricing disclosures and transparency, it pays to be careful.
Here’s how to not suck at buying your own funeral arrangements.
BEFORE YOU SHOP, BUYER BEWARE
An AARP survey [PDF] from 2007 found nearly a quarter of those over age 50 pre-paid at least some of their expenses, and the National Funeral Directors Association says the average funeral costs about $6,500.
Of course, that doesn’t include items such as flowers, obit notices, car service transportation for family members or other items like monuments, so overall funeral costs can hit $10,000 pretty quickly.
The Federal Trade Commission says consumers lose millions of dollars every year “when pre-need funeral funds are misspent or misappropriated. A funeral provider could mishandle, mismanage or embezzle the funds.” It says some providers even go out of business before a consumer needs the benefits, while others sell policies that are worthless.
The FTC offers some protections through the Funeral Rule of 1984, which requires funeral providers to give consumers “accurate, itemized price information and other specific disclosures about funeral goods and services.”
But, the FTC says, the rule doesn’t apply to many features of pre-paid funerals, which are governed by state law. (At least it is for all states except for Alabama, so you guys are out of luck.) Of course, all the state regs are different, and some protect consumers better than others. Take a look at what your state offers here.
If you run into problems or have questions about your state’s laws, most states have a licensing board that regulates the funeral industry. Learn more about how to file a complaint in the right place from the Funeral Consumers Alliance.
WHAT TO LOOK FOR
Be sure to read the FTC’s consumer guide on funerals before you start the process.
Then, remember these tips:
Shop Around: As long as you’re planning for the future, you have time to comparison shop. The AARP study found 79 percent of those who bought pre-paid plans didn’t shop around. Indeed, you can pay for different services from different providers. The FTC says a funeral home can’t refuse or charge to use a coffin you buy elsewhere, for example. You can open the phone book, or check out the National Funeral Directors Association’s list of providers.
Where The Money Goes: Make sure your money isn’t being used for a Ponzi scheme. The FTC says funeral homes must disclose to you what it will do with your payments. Some may put your payments into a trust account that’s earmarked for your services, while others may buy life insurance policies and use the proceeds for your funeral care.
Understand The Contract: Like all other contracts, you need to read the fine print, and if you don’t understand what you’re reading, ask someone — and not the funeral director — for help. Also check out the FTC’s primer on funeral contract language.
Find Out What’s Included: It’s very possible not all costs are included in your pre-paid plan. Some may not include, for example, an entombment if you plan to spend your hereafter in a crypt. And ask about contingencies, such as who is responsible to pay for you to be transported if you die far from the funeral home.
Prices and Inflation: You don’t know when you’ll die, but you can bet that inflation — rising prices — will impact funeral costs in the future, just like it does everything else. Look for a prepaid plan that’s “guaranteed,” which essentially means you’ll get the services you pay for no matter how expensive they are down the road. Plans without a guarantee will probably mean the people you leave behind will have to fork out some funds to get you to your final resting place. Also ask about what happens if the casket you select isn’t available years down the road when you die.
I Changed My Mind: Even if you choose carefully, you may change your mind if your circumstances change, such as if you get married or move out of state. Find out about refunds and cancellations, and if your funds could be transferred to a different funeral home. Also make sure you get in writing what happens if the funeral provider is sold to another company or if it goes out of business.
Do You Need a Pre-Plan?: Many elder law attorneys recommend consumers buy pre-paid funerals to lower their net worth, especially when the consumer is trying to apply for Supplemental Security Income from Social Security, or Medicaid. That might seem attractive, but unless you do your homework, your relatives will be stuck with headaches, and the bill. Remember you always have the option of starting a special investment account that’s earmarked to cover your funeral expenses, or buying an insurance policy that’s meant for your final costs.
FINAL COMMENTS (NOT THAT KIND OF FINAL, SILLY)
While we’re on the topic of kicking it, read this story [PDF] I did for a now-defunct web site, but can still be found online. It’s probably my favorite and most important story of all time — the 10 things you’ll need for your “`When I’m Dead’ File.”
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You can read Karin Price Mueller’s stories for The Star-Ledger at NJ.com, follow her on Facebook, and on Twitter @kpmueller.
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