Should you purchase prepaid funeral arrangements?

Many people do not like to think about death or funeral arrangements, but some people do make plans for when they pass. For example, some people choose to purchase “pre-paid funeral contracts.” These contacts allow you to make decisions about your own funeral, and pay for it ahead of time.

These pre-paid contracts give some people peace of mind. But before purchasing such a contract, keep the following issues in mind.

First, under Ohio law, a pre-paid funeral contract must always be in writing. Do not hand over any money if the funeral director does not give you a written contract. The written contract must include a statement of the funeral services you have purchased.

Second, a funeral contract can either be “guaranteed” or “nonguaranteed.” Under a “guaranteed” contract, the funeral home guarantees to provide the funeral services you’ve chosen for the amount you paid at the time. It will not matter if the price of the services increases later on. The funeral home cannot ask your family for any more money.

However, a “non-guaranteed,” contract is different. In that case, the funeral home can hold on to your money and refuse to perform the funeral services you asked for if the money you paid is not enough to cover the cost at the time you pass away. The written contract must tell you whether the contract is “guaranteed” or “non-guaranteed.” Always be sure to ask which one it is.

Third, you can cancel any contract for pre-paid funeral services for seven days after you make the contract. After those first seven days, you can only get your money back if it is a “revocable” contract. (Even if your contract is revocable, a funeral home often can keep some percentage of the money paid.)

Other people want their contract to be “irrevocable” — meaning they cannot cancel it after those first seven days. In fact, if you are buying a pre-paid funeral contract to spend down your assets to qualify for Medicaid, the contract must be irrevocable. The written contract must also tell you whether the contract is “revocable” or “irrevocable.” Always be sure to ask which one it is.

When considering a prepaid funeral contract, be sure to get all the information and read the documents carefully. Do not sign anything until you are certain it gives you the benefits you are paying for.

This article was written by Rebecca Maurer and appeared in The Alert: Volume 33, Issue 1 and reprinted with permission from The Alert, a publication of The Legal Aid Society of Cleveland.