Barton Family Funeral Service does not recommend paying for a funeral in advance unless your accountant or attorney suggests it for estate planning purposes. Our fees are so low that there is seldom any reason to prepay, however, if a
family wishes to set money aside outside the estate, we offer small insurance policies for such purposes. The policy may be tied to a preplanned funeral or the face value may simply be paid the the beneficiary.

Definitions

Preplanned funeral contracts are often called “Pre-need” contracts to distinguish them from “At-Need” contracts that are written between the consumer and funeral establishment at the time a death has occurred. At-Need contracts are drawn up often within minutes after a death has occurred and when the family is least prepared to struggle with all the decisions iinvolved. So the concept of making these decisions early and in a more informed manner makes sense.

Then why is there still so much criticism of these Pre-need plans?

The short answer is that in a small number of cases, a funeral establishment has breached the contract or fraudulently absconded with the trust funds that were paid to fund the funeral. Lawsuits to settle these cases receive a disproportionate amount of attention.

The longer answer involves the interaction between the funeral provider and the family of the deceased person when they go over the arrangements that have been made. If a family wants to materially change the plans that have been made, they are in effect negotiating a new contract and “all bets are off”, as the saying goes. A favorable outcome depends on the goodwill of everybody involved. Unfortunately some funeral establishments use the family’s desire to change something as an opportunity to significantly raise prices.

There are two important parts of all contracts, the part that says what is going to be done, and the “consideration” part that says who will pay and how much will be paid. A Pre-need funeral contract simply states that a funeral establishment agrees to provide the goods and services stated in the contract at the agreed price no matter how much prices may increase in the future. To make sure the funds are available when needed, the contract may provide that money either be held in a trust account or that the cost of the funeral be paid from the proceeds of an insurance policy.

Important Note

A pre-planned funeral does NOT have to be tied to a pre-payment contract.

We routinely write short term pre-need contracts and keep them on file as a service to families who have
chosen us to provide their funeral services. They simply pay for the services when they are needed. It is a convenient way to record the necessary information before the death occurs. Changes may be made any time and the contract may be cancelled or ignored altogether without any consequence.

We also sell insurance to pay for a funeral that may be several or even many years in the future. The terms of the agreement are tailored to each individual’s needs and preferences.

Federal Trade Commission Suggestions

The Federal Trade Commission suggests some questions to ask in their publication, Funerals,
A Consumer Guide:

• What are you are paying for? Are you buying only merchandise, like a casket and vault, or are you purchasing funeral services as well?
• What happens to the money you’ve prepaid? States have different requirements for handling funds paid for prearranged funeral services.
• What happens to the interest income on money that is prepaid and put into a trust account?
• Are you protected if the firm you dealt with goes out of business?
• Can you cancel the contract and get a full refund if you change your mind

Funeral Consumers Alliance

At least one-third of the complaints received in the national office of Funeral Consumers Alliance has to do with prepaid funerals. Some of the most common are:

• “The funeral director told me the casket dad picked out was no longer available and we’d have to buy another (more expensive one)”
• “I’ve had to move in with my children in another state, and the funeral home says my prepaid money can’t be transferred to another funeral home”
• “My mom changed her mind and now wants to be cremated, but the funeral director said the plan can’t be changed”

Plan Ahead

In spite of the obvious pitfalls involved in some preplanned funeral contracts, planning ahead is still the best strategy to avoid having to make funeral arrangements under stressful conditions when a death has just occurred.

Gather Necessary Information

The first step in planning a funeral is simply writing down all the information that will be needed on the death certificate. Click here for a copy of a Washington State death certificate to see the kind of information needed. (Note: This is a large image that loads slowly depending on your connection) Keep the information in an accessible location known to family members. Do not keep it in a safe or bank safe deposit box, where it will be difficult to access quickly when needed.

Let Your Wishes Be Known

Write down what you want to be done and talk to your family about it. If you trust the funeral director more than you trust your family, you may have a good reason to prepay for a specific funeral arrangement at a specific funeral home.
This sort of problem should be part of a more comprehensive estate plan. Consult a lawyer to make sure your Will is well drawn so that all your wishes will be carried out. This may also involve forming a trust to solve potential
probate, tax, or inheritance matters. But if you trust your family, they will be the ones who take care of your affairs after you are gone. It is immensely helpful to them if you write down what you want them to do and then they will decide how to do it based on the conditions they face.

Please call us at (425) 823-1900 for a free copy of our planning guide. It provides a record in booklet form of all the information that is needed when someone dies.

Prepayment Has Both Advantages and Risks

Generally, prepaying for something you will never see is not a good idea. How do you know you will get what you pay for? In the case of a funeral, the answer is, “you don’t.” The ones you leave behind are the ones who will know that you got what you paid for. They will appreciate that you have allocated funds for your funeral and have instructed them what you want.

We believe that life insurance is the safest and most economical way to fund your funeral arrangement. Funds placed with funeral homes in their trust accounts are subject to confusing regulations and in some states the regulations are totally inadequate to protect your rights. So stick with insurance. It is portable and can be assigned to a specific
funeral arrangement. If you move, your family can use the cash value of the policy to pay for part or all of a funeral it in the new location.

Advantagesof Insurance

The primary reason to provide funds for a funeral is to spare your family the expense. It is a responsible thing to do. With our increased longevity, some people outlive their income and have to rely on public assistance programs to survive. Personal funds are drawn down to such low levels that there is no money for a funeral unless a life
insurance policy is in place to pay for it. Such policies are excluded when the state determines who qualifies for assistance. Insurance proceeds are exempt from inheritance tax, the policy cannot be taken in judgment or a lien place on it, and it is immune to attachment or seizure by any court or governmental agency.

The states have a long and excellent history of regulating life insurance companies so you can be assured that the money will be there when needed.

Disadvantages

The major disadvantage of life insurance purchased at an advanced age is the cost. It really amounts to little more than pre-payment because the premium is close to the cash value of the policy. In fact if you die shortly after writing such a policy, the cash value may be less than what you paid for the policy because a sales commission was subtracted from the amount you paid. When tied to a guaranteed contract for funeral services, the policy still pays for the full amount of the funeral by the firm who wrote the contract, so it all works out in the end. The biggest problem arises if you die far from the funeral establishment that wrote the contract and are forced to use another company in the new location. In
general, the only time another funeral establishment will honor your contract is if it written at prices they are willing to accept. Of course they will accept an assignment of the insurance proceeds and apply it to a funeral service at whatever price your survivors are able to negotiate.

Our Prepaid Funeral Contract

Barton Family Funeral Service writes a prepaid funeral contract tied to insurance from Great Western Insurance
Company. We receive a small commission on the sale of the insurance.

Unique Benefits
-

Accidental Death Benefit-


Full death benefits are paid during the first two policy years on graded-death benefit policies for accidental death. No additional premium is charged.




Away-From-Home Death Benefit-



In most states an additional $500 death benefit is paid when death occurs more than 250 miles from the insured’s residence. This benefit helps pay the additional costs involved when death occurs outside the funeral home’s service area. Policies written for $2,000 or greater carry this benefit. No additional premium is charged.







Liberal Age Limits-



Multiple payment plans may be written from birth to age 87; single-payment plans are available to age 99.







Tax and Attachment Protection-



All plans are designed to avoid taxes by the IRS or attachment when financial care is assumed by Medicaid.







Rapid Payment on Claims-



The majority of death claims are paid within 24 hours upon receipt of claim forms. A fax line is available to accelerate the claims-payment process. Electronic bank deposit is also available to avoid mail delays.

Washington State has a stringent set of guidelines to assure consumers that pre-need contracts are fair. This means that the contract spells out what your rights are and provides for full disclosure of all the costs. All of our pre-need funeral ontracts are based on our low fees and deep discounts on caskets, urns, or other funeral products.

LINKS TO FURTHER
INFORMATION ABOUT PRE-NEED FUNERAL
CONTRACTS

From AARP:

Pre-need Funeral and Burial Agreements