Pre-Need Funeral Arrangements
by Frances Knox
My Dad recently passed away and my siblings and I will be forever grateful to him for having the foresight to have his funeral arrangements already completed and paid for. This process is known as “Pre-Need Burial Insurance.”
The rules of this service are strictly governed by the NC General Statute §90-210.
There are two categories identifying funeral merchandise. One is at –need sales or sales upon the death of a decedent and Two, pre-need sales which are connected “with the final disposition of a dead human body, to be furnished or delivered at a time determinable by the death of a person whose body is to be disposed of.
There are also two categories of pre-need burial arrangements which may be funded through insurance or banking institutions. Both of these categories draw interest starting from the time monies are deposited.
- A POD, or Payable on Death Account is an account that you set up with your local bank. Generally, this is a free account and you obtain from the bank a form for naming a POD beneficiary. It is NOT recommended that you name the funeral director as your beneficiary. The beauty of this arrangement is that the funds do NOT have to go thru probate after your death. The funds will not be frozen unless you state and/or bank requires proof that any state death taxes have been paid.
- Burial Insurance can be purchased through an insurance broker or from the funeral director who will write a policy covering specific products and services you feel are necessary. These services include the casket, burial vault or grave liner, grave maker, hearse, flowers, digging and filling the grave and the actual cemetery plot. Embalming is only required if there is a public viewing of the deceased.
There are two types of pre-need funeral contracts:
- An inflation-proof pre-need funeral contract which establishes a fixed price for funeral services and merchandise without regard to price increases. The forms used for pre-need funeral contracts are only those forms approved by the NC Board of Mortuary Science.
- A Standard pre-need funeral contract applies the trust funds of insurance proceeds to the purchase price of funeral services and merchandise at the time of death of the contract beneficiary without a guarantee against price increases.
In addition, with so many residents of this area who have relocated from other states, it is comforting to know that there may be a substitution of the funeral home the original contract was made with and a different funeral establishment may be directed to furnish funeral services and merchandise. It is wise to inquire with the funeral licensee before signing a Pre-need funeral contract the requirements for relocating the funeral whether it is in this state or out of state.
Also, it is a state regulatory agency requirement that an administrative fee of $20.00 be paid for all funded advance funeral plans to the North Carolina Board of Mortuary Science. This is a fund established to reimburse purchasers of pre-need funeral contracts who have suffered financial loss as result of negligence of any licensee.
Keep in mind that an irrevocable burial fund set up with a bank or a funeral home is also excluded from Medicaid requirements.
If you have a complaint regarding pre-need funeral arrangement issues, they may be addressed in the NC Board of Funeral Services on their website at www.ncbfs.org.
It is recommended that when beginning the pre-need funeral arrangement process that you obtain more than one estimate from a funeral home as prices can vary greatly.
With prices expected to increase substantially in the future, contracting to pay for funeral expenses in advance will keep the costs at least even with what today’s prices are.
If you have ever made funeral arrangements for a loved one, you come to realize how overwhelming it can be. Major decisions concerning merchandise prices are made from the heart and not from a financial aspect. The majority of the times the financial resources that may be available to pay costs associated with funeral expenses are not known to the family until after death and probate or administration proceedings take place.
Simply put, this takes the guess work out of it and the sometimes mistaken anticipation that funds are available to bury your loved one. Pre-need funeral arrangements are the exact wishes of the decedent carried out in a dignified manner with no uncertainties about what the decedent would have wanted and more importantly, what resources are available to pay for funeral expenses.
Frances Knox is an attorney with Knox Law Center. She can be reached at 704-315-2363 or 866-704-9059 (Toll free). The firm’s website is www.knoxlawcenter.com. and her email address is [email protected].
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