Before You Sign the Funeral Contract
Whenever you pre-plan a funeral or make arrangements to handle the remains of a loved one, you will be asked to sign a contract with the funeral home. This is designed to protect both you and the funeral home, which is why it’s important to make sure you understand the fine print before you sign (and why you might possibly run it by your lawyer first).
State Laws and Funerals
Although the funeral industry is regulated at the federal level, most states have their own rules and laws when it comes to funeral pre-plans and contracts. If you have any questions or concerns about your contract or what your rights are, you are encouraged to either contact the Federal Trade Commission or your state’s regulatory bodies.
Funeral Contract Guidelines
In order to provide pre-need contracts to the public, most proprietors have to go through a series of state guidelines that are in place to protect you from scams. This process is different for each location, but generally includes securing permits through the state banking department, for third-party trust and lending actions, and for selling insurance.
Any company that does not have the correct permits or is vague about providing information about their financial backers should be avoided. Because many funeral pre-plans are purchased decades before death occurs, you want to ensure that you’re working with a reputable company that will last.
Revocable and Irrevocable Contracts
There are many different kinds of funeral pre-plan contracts and packages, each one with its pros and cons. Irrevocable contracts are legally binding and cannot be canceled to get your money back. However, many of these types of contracts do allow you to transfer the agreement to another funeral home. If you need flexibility in your pre-plan package, be sure and know your rights.
Revocable contracts typically come with a cancellation policy that will allow you to get some of your money back (minus fees). Because funeral homes don’t like this type of contract, you may pay higher interest rates for the privilege, or you might be limited in the scope of services covered.
Before You Sign
If you have a funeral pre-plan package or funeral home in mind, be sure to run the contract by a lawyer or trusted relatives and friends first. Not only can they help you look for potential red flags, but you should also be sure they have copies of the funeral contract for future use. This is especially true if you are planning a funeral that your loved ones might not agree with—by executing a document that is legally binding and is kept in the care of someone who can be counted on to see your wishes carried out, you have a much better chance of things going smoothly.