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Pre-Need Funeral Arrangements
Pre-need funeral arrangements may be financed through NGL (National Guardian Life). I presently represent them as a Pennsylvania licensed life insurance agent.
Some persons, due to age, physical condition, or personal preference may prefer to have their funds placed in a burial trust account with a local bank. In this instance I believe a notice of the interest accrued on the account each year will be mailed to the person for whom the trust was set up. The interest must then be reported as interest income to the Internal Revenue Service and may be subject to tax.
With insurance plans the interest accrues to the account without the necessity of reporting it to the IRS or paying taxes on the interest.
Questions I am often asked about pre-need monies paid to me:
Does the funeral home keep the money I pay to them?
Answer: At no time are any monies given to us retained by the funeral home. 100% of all monies are placed in trust for the funeral services of the purchasing party either through an insurance company or bank.
What happens if you are no longer in business when I die?
Answer: Should we go out of business your funds are safely invested and will be paid to whichever funeral home provides the funeral services.
Will this other funeral home provide the services you’ve agreed to provide?
Answer: A funeral home other than the Shell Funeral Home, Inc. is not required to provide the same services for the same price, but in most cases will. The majority of family owned funeral homes are pleased to have the opportunity to serve a new family and know there is a profit to be made even if it may be smaller than they are accustomed to earning. If you choose to go to a different funeral facility it would be wise to ask them prior to signing any contract if they will honor your present contract and provide the same services and merchandise at no additional cost to you. At the very least, all monies given to our firm plus the interest accrued will be returned to you or the funeral firm you transfer to.
Do you keep any of the monies we pay to you as a service charge or handling fee?
Answer: No. All funds provided to us, plus interest accrued, will be returned to the family in the form of the requested services being satisfactorily supplied or by transfer to another funeral home should we no longer be in business.
What if the money we pay to your firm and the interest it accrues does not cover the cost of my funeral in five or ten years due to inflation?
Answer: We will provide our services, and the merchandise we have promised for the funds available in your burial account to cover those things. Nothing more will be charged to your family for those services and merchandise we are legally obligated to provide. However, a portion of your funeral pre-arrangements may not be guaranteed by our firm because we have no control over them. These are the cash advance items. Whatever funds you may pay to us to cover the cost of these cash advance items will accrue interest. The interest may not always be enough to offset inflationary increases. Cemeteries that are purchased by large corporations and unexpectedly raise their prices are the main worry. Your estate or family will be required to pay any unexpected increases in these costs.
What if the money in my account is greater than the cost of my funeral services when I die?
Answer: Upon your death we provide the services we agreed to provide and deduct the cost from your burial plan. If there are excess monies in the account they will be returned to your estate or next-of-kin.
Can I or my family make changes to my burial plans?
Answer: If you approve the changes while you are living, yes. If you make your funeral plans irrevocable, changes cannot be made to them.
What does irrevocable mean?
Answer: Basically it means NO ONE can touch your money until you die and then only the funeral home that provides your funeral services. This designation assures that your funeral funds are available even if you are placed in a nursing facility and all of your other monies have been completely depleted to pay for your care. When we place your pre-need monies with one of our insurance companies we DO NOT make the plan irrevocable until you tell us to. This means that at some future date, in an emergency, if you were forced by your financial situation to withdraw funds from your pre-paid burial insurance account you could do so. However, at that point in time we would no longer be required to provide the services you originally requested until arrangements had been made to pay for them in full.
I will be happy to answer any other questions you or your family may have.