| What is the difference between preplanning and prepaying? |
You can preplan your funeral WITHOUT paying now. When your plan is complete, the funeral director will keep it on file until it is needed. Your estate will then have to pay for the services at the rates being charged when your funeral is held.
In addition to preplanning, many people choose to prepay their funeral expenses. Prepaying for a funeral allows you to pay for your funeral ahead of time. You can enter into an agreement with a funeral home, and the money will be held in the name of the funeral home as trustee for you. |
|
| Are there advantages to preplanning funeral arrangements? |
| Yes. Preplanning can give you the opportunity to select a funeral service which will meet your needs and wishes. It can reduce the concerns of your family and friends who would otherwise have to guess what you would have wanted for your funeral. |
|
| Are there advantages to prepaying funeral arrangements? |
| Yes. you can have the peace of mind that comes with knowing that the money needed for your funeral has been set aside. If the funeral director has guaranteed the funeral, your survivors will not have to worry about how to pay the bill. When you prepay, the funeral director will provide a Pre-need Agreement which addresses many important matters, such as: how the final expenses will be determined; if additional funds will be needed when death occurs; and, what will happen it any money remains after the funeral bill is paid. |
|
| Are there drawbacks to prepaying? |
Yes. as with any financial transaction, there are potential drawbacks. While the law gives New Yorkers some of the strongest protections in the country, it does not provide for absolute protection.
1. Make sure you always have a pre-need agreement for the services whenever you prepay a funeral, whether it is directly with a funeral home or on your own with the funeral home as the beneficiary.
2. Let someone you trust know that you have prepaid you funeral arrangements. Otherwise, they may select a different funeral home and pay again.
3. Know how and where your money is being deposited.
|
|
| Which bank will my funeral trust be established with? |
| Brown Funeral Home establishes funeral trusts through Adirondack Bank because we feel it is important to keep and do business with a local bank. |
|
| How do I prepay my funeral? |
Call and make an appointment to meet with the funeral director. Prior to making any selections, the law requires the funeral director to give you:
1. A GENERAL PRICE LIST with the current prices for any merchandise, services and facilities offered by the funeral home.
2. 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 your final decision, or until you have chosen someone to make these decisions for you.
3. A 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, funeral homes may offer "guaranteed" funeral or a "non-guaranteed" funeral in the agreement. |
|
| What is a "guaranteed" funeral? |
| With a guaranteed funeral, the funeral home guarantees to provide the services, merchandise and facilities you selected for the amount of money in your account. The guaranteed funeral is not affected by future price increases since the funeral home accepts the principal and interest as payment-in-full. Your estate will not have to pay anything extra for those items that are guaranteed. A guaranteed funeral will not include certain items such as cemetery costs, clergy fees, death certificate fees, etc. However, the funeral home cannot charge more than the ACTUAL cost for these cash advance items. |
|
| Is it possible to prepay cemetery, clergy and monument costs? |
| Yes. But many funeral homes prefer not to include these expenses because they have no control over them. If you want to prepay these expenses, they will probably be non-guaranteed. As an alternative, you can deal separately with the church, cemetery, or monument dealer. |
|
| What happens to the money I prepay to a funeral home? |
| The funeral director must deposit your money within 10 days in an interest-bearing account. |
|
| How will I know my money has been deposited? |
| The funeral director must notify you where your money has been deposited within 30 days of the deposit. Also, the location and amount of interest earned will appear on the IRS form 1099-INT (or equivalent) sent to you in January of each year. Check the account information carefully each year. Also, upon your written request, the funeral home must advise you of the total value of your account, including principal and interest. |
|
| Am I responsible for paying income taxes on the interest earned by this account? |
| Yes. It is still your money. |
|
| Can I get my money back if I changed my mind? |
| If you established a revocable agreement, you can withdraw the principal and accrued interest at any time. The funeral director cannot charge any processing or administrative fees, or penalties for early withdrawal. However, if you established an irrevocable agreement you cannot withdraw any principal or interest ever. |
|
When is an irrevocable agreement established?
|
| You must establish 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 in which an irrevocable preneed agreement may be established. The moneys paid to fund these agreements may not be refunded under any circumstances. |
|
| If there is an irrevocable agreement, can I change funeral homes? |
| Yes, the moneys may be moved from one funeral home to another. To have moneys transferred, notify the funeral home in writing of your new choice of funeral home. The moneys must be transferred within 10 days of receipt of your request. |
|
| If moneys are left in an irrevocable account after the payment of the funeral expenses, is the money returned to my estate? |
| No, any moneys left in an irrevocable account must be paid to the county. |
|
| Can my next of kin change my preplanned or prepaid funeral arrangement? |
| Yes. Changes in the funeral home arrangement you have chosen can be made by your next-of-kin when death occurs. If you do not want the arrangements to be changed, you should speak with an attorney. An attorney can tell you what legal documents, beyond the pre-need agreement, are needed to prevent any changes. |
|
| What happens if the home sells its business to another funeral home? |
| Both funeral homes must provide written notification to you WITHIN 30 DAYS of the sale. At any time, you can: change your arrangements; request your money back with interest; or give written authorization to transfer the funds to another funeral home. |
|
