Preneed
Funeral prearrangement, or preneed is a choice many consumers are making today. Simply put, prearranging a funeral means making decisions about what type of funeral arrangements you desire. Choices about the type of services (if any), a choice of casket and outer burial container are all a part of the pre-arrangement process. You can also make decisions about others items and details about your funeral, such as clergy, place of burial or other method of disposition, flowers, information for an obituary notice and other details you may wish to include. A prearrangement can either be "paid" or "non-paid". Several of the most commonly chosen methods of pre-payment of expenses are cash, financing or assignment of life insurance proceeds.
Most states, including Ohio, have strict laws concerning the way preneed moneys are handled by funeral homes. Ohio has a 100% trusting law for funeral services and merchandise purchased; which means that all of the moneys exchanged in consideration for a preneed funeral contract that fall into the category of funeral services and merchandise must be placed into a "trust" and left at interest until such time as needed. In Ohio, moneys may be commingled for investment purposes with other preneed funds, but must accounted for separately.
Usually, when the arrangements are prepaid in cash or financed, the funeral is set up as a "guaranteed " funeral. In other words, the funeral home will provide the items included in the preneed contract at the time they are needed without additional charge to your family. However, if financing your arrangements, their may be limitations as to when that guarantee begins. Most funeral homes will not guarantee the funeral if your insurance policy(ies) are used to fund the prearrangement or if the consumer chooses not to pre-pay the expenses. Also, some funeral homes will not guarantee the cash advance items included in your arrangements.
It may be necessary for the paid funeral prearrangement to be termed as "irrevocable" if the funeral recipient (contract owner) is applying to or is currently receiving Medicaid assistance. Making the contract irrevocable does not change what or how the funeral home will provide the services and merchandise at the time of need, but does revoke the right of the contract owner to "cash-in" their funeral prearrangement.
Questions To Ask When Prearranging
- Will I pay for my prearrangement now or wait until a time of need?
- If I wait, what will be my financial health at the time of my death?
- Will my family have access to my financial resources to pay for my funeral?
- If not, who will pay for my funeral, and how?
- What type of service, casket and burial vault will fit into my budget?
- How will I pay for my prearrangement? Cash, financing, insurance assignment?
- Is my money safe? What funding vehicle will be used? (Trust, Insurance, Passbook Savings, etc...)
- Are all things needed included into my prearrangement? Will my family have to pay any additional charges at the time of my death?
Please feel free to Contact Us for more Information