What to Consider when Buying Funeral Goods & Services in Advance
If you purchase in advance, you should know what’s to be delivered immediately and what’s to be delivered at the time of the funeral. When you take possession of merchandise, ownership transfers to you. On the other hand, when products are to be delivered in the future (i.e., at the time of the funeral), you have only received a promise … not ownership. Timing of delivery can affect your choices and should be a consideration in determining whether to prepay the provider or to set aside money in a funeral trust or funeral insurance.
Some buyers of pre-need funeral goods prefer delivery at the time of purchase to ensure that they have received what they paid for. You should consider whether this is important to you. Also, be aware that providers of pre-need funeral goods often prefer to make delivery at the time of the sale because ownership transfers to the buyer. This enables them to improve their cash flow by avoiding trusting requirements (see Funeral Trusts) and could influence the suggestions they make to you.
State laws govern how these prepaid funds can be used. Most states have laws requiring that providers set aside a certain % of funds received in advance in a trust account. This pertains to goods and services that are promised for future delivery. However, the trusting requirement can vary from 30% to 100% and the provider manages the trust. You should be cautious about making prepayments directly to your provider if the purchased items are not to be immediately delivered, especially if the trusting laws in your state are lax.
The Pros and Cons of Accepting Early Delivery of Funeral Products
Certain pre-need items can be easily delivered in advance. For example, title to cemetery property is often conveyed to the buyer at the time of sale. In this case, you immediately own the rights to a specific cemetery plot even though it may not be used for burial until some indefinite time in the future. Grave markers are also often delivered at time of sale. The marker might even be engraved and set at the grave site in advance with the only remaining deliverable being to engrave the date of death.
Many goods and services cannot be delivered in advance. The various services of the funeral director, as well as the cemetery’s services of opening and closing the grave, must occur at the time of the funeral. Also, mausoleum crypts are often sold before the mausoleum is built. If you purchase a crypt that is not yet built, your contract should provide a completion date with a full refund if construction is not completed by that date.
Some funeral products can be delivered in advance but not without certain risks. For example, pre-need sellers may deliver products in advance by putting the purchased item in a storage facility until the time of the funeral. Be cautious if you choose to do this. For example, warehoused caskets and burial vaults can be susceptible to damage and deterioration if not properly protected.
For more on funeral planning: Check out our Wise Planning System