Avoiding Problems With Prepaid Funerals - Estate Planning 101
HTML-код
- Опубликовано: 21 июл 2024
- Moderator Scott Trout visits with TuckerAllen estate planning attorney Kevin Mason about how to avoid problems with prepaid funeral plans.
Individuals who purchase prepaid funeral plans typically do so with the intent of relieving financial stress for loved ones after they are gone. Unfortunately, these plans are often problematic and end up costing more than expected. Mr. Trout and Mr. Mason talk about the issues with these plans and how to avoid the problems associated with them.
If you have any estate planning questions or concerns, contact TuckerAllen.
Click: tuckerallen.com/
Call: 314-335-1100
I own a funeral home in Houston, Texas and around minute 3:20 Kevin Scott stated incorrectly that the funeral home gets paid (“free money”) when the prepaid contract is sold. Not in Texas. Prepaid funeral funds, by law, go into a life insurance policy, not to the funeral home. Do your homework, guys.
At minute 5:50 Mr. Trout says, “I’ve seen these businesses go out of business and you lose everything.” Wrong. Because the funeral home does not hold the funds, an insurance company does, at the time of death of the insured, the insurance company will pay the death benefit to whatever funeral home the family selects. Or, the insurance company can also pay the money back to the family. Pro Tip: a family isn’t obligated to use the same funeral home at the time of death and plenty of funeral homes would gladly service a competitors prepaid funeral contract.
Full disclosure: I agree a prepaid funeral contract isn’t the best use of your money as there are better financial instruments out there that will give you a better return. The thing is, when many people make the decision to prepay their own services they aren’t looking for the best financial investment. They just don’t want their kids to have to deal with it.
By law the funeral home has to transfer the prepaid contract to another funeral home if it goes out if business. The interest in the policy is what pays the difference in the price of the funeral when a policy holder lives a long time from the purchase date and death date. I am sorry you both are so ignorant about the use of a preneed plan underwritten by a viable company- putting 5 or 7 K in a bank account does not lock in the cost of a funeral. Every 7 years the cost of a traditional funeral doubles . You really need to get information on the legal process governing the funeral home, the underwriting Ins company and the agents selling these plans.
Ms. Saenz, your first sentence is not correct. If a funeral home goes out of business, a prepaid funeral contract may be used as a form of payment at another funeral home. It happens all the time.
Your last sentence, though, was spot on!
It just really seems as if you all feel like prepaid funeral services is taking money out of the billionn trillion dollar industry of insurance policies. By the way I am prepaying my cremation services it's only gonna be a $1000 my family will not have to worry about my a services.
Guys y’all are talking about. Final expense cause pre need is totally different The client is insured if the funeral home goes out of business also even with whole life or term you never get a full refund if you cancel like someone said do your homework. I alway let me clients know that we covered the first 25 the Miles then y’all are talking about saving the money well your not locking in the price of a funeral service and No decision has been made in the type of service you want Rather it be cremation or traditional burial
God forbid if everyone just takes their money and pay for prepaid funeral expenses the insurance companies will pretty much be out of business because they won't get those payments every single month and it is a lot cheaper
I do understand that there are some nefarious funeral homes but you are really doing the family a disservice by not the misinformation. I am in the industry and what you are saying are not that accurate.
These prepaid plans are almost always a poor choice. Invest your cash in a traditional annuity earmarked for funeral expenses. Get a beneficiary you trust. Inform them on what is going to happen. Why would you let a funeral home use YOUR money to enrich themselves? As a business model this stuff is insane.
Funerals aren't an investment. Prearrangements are designed to ease stress on families at the time of loss. NOT JUST THE FINANCIAL STRESS, but the tedious decision-making. Funeral Homes don't "get-enriched" with the money. It's held in a government-insured annuity and cannot be touched until the time of loss. And the arrangements are moveable, if the client has moved elsewhere or changed their decision on which funeral home to use. Do your homework before you write an inaccurate, greedy comment
I agree, but only from a "financial" perspective. There's more to this than finances, however. The caveat is "get a beneficiary you trust". If you're single, your extended family is dysfunctional, and you wish to have control over your funeral for religious reasons and are concerned of the disposition of your final remains, pre-need plans can be an option that bring a lot of peace. Pre-need can be a good option if you can pay for the pre-need contract outright (no financing) and you pay attention to the details of the contract (guaranteed vs. not guaranteed, revocable vs. irrevocable, laws in your State concerning transfer of policy if the funeral home goes out of business). No black and white answer here. Depends on who you are and what you need.
Insurance salespeople are worse then used car salespeople.