Pre-Plan & Pre-Pay FAQs

Pre-planning is the process of making funeral arrangements, often including pre-payment, prior to one's death. When you pre-plan, the funeral director will provide a pre-need agreement which includes a bill of final expenses, a statement outlining  if additional funds will be needed when death occurs and details involving selected merchandise such as urns or caskets. These arrangements serve as a guideline for both family members and the funeral service provider. 

Pre-planning is important not only for you but your family, for a variety of reasons. First, it leaves behind clear instructions for your preferences and helps alleviate the financial burden placed on your surviving family members. Second, it ensures that you choose a firm with a good reputation and fair prices. Ultimately, pre-planning provides an opportunity to make plans that meet your needs and leaves behind a clear picture of your wishes for the family. 

Pre-paying for a funeral involves a few steps. First the funeral director is required to share a general price list, which indicates the current prices for all merchandise. Second, they need to provide a pre-need itemization statement lists the items of merchandize, services and facilities you have chosen and the price of each. The final step is a pre-need agreement which outlines the terms, your rights as the purchaser and states how the principle and interest will be applied to the cost of what you have arranged. After payment has been transferred or a payment schedule has been arranged, the process is complete.

As with any financial transaction, there are potential risk factors and disadvantages. While the Pre-Need Funeral Consumer Protection Act enforces strong regulatory measures, it does not provide absolute protection. You still have to do your due dilligence. This includes making sure you have a pre-need agreement for when you  prepay for a funeral. In addition, it is important that you let people know about your arrangements and what firm they are at.  When it comes to actually paying for your arrangements, know how and where your money is being deposited. If you pay by cash, get a receipt and keep it in a safe place. The bottom line is no matter how much you trust a firm, always take precautions to protect you and your family. 

The process varies from state to state and province to province. As a result, it is important to confirm all details with your funeral professional and/or accountant. The location and amount of interest earned will appear on the IRS form 1099-INT (U.S.) or CRA form T5 (Canada) sent in January of each year. Also, upon your written request, the funeral firm must provide the total value of your account including principle and interest. As a result, you can always keep tabs on where your account stands and how much remains to be paid.

Yes, as it is still your money.

Yes. You can withdraw the principle and the accrued interest at any time from your funeral home account. The funeral director cannot charge any processing, administration fees or penalties for early withdrawal. This is an added layer of security for families. 

 Yes. Changes can be made by your next-of-kin after your death. If you do not want this to be an option, it is a legal issue that requires you speak to an attorney. This way you can make legal arrangements with the proper documentation to ensure your wishes are followed. This type of arrangement can't be made or promised by a funeral service professional. 

Funeral firms, whether it is the buyer or seller, is required to provide minimum of 30 days written notice to you. Even if a firm is sold, you have the ability to change your arrangements, request a refund or give written permission to transfer the account to another firm of your choosing. 

Much like with the sale of a funeral home, the firm is required return your money, with interest, or you have the option with transferring the account to another firm.