When funeral arrangements are made subsequent to the death of a family member, the meeting with a funeral director can be very emotional. Addressing the paperwork required by law often adds to the stress of the arrangement meeting. Sensitive to the individual needs of the family, funeral directors attempt to balance legal requirements with the emotional state of the individual who controls the deceased’s disposition.
The funeral director’s arrangement paperwork is defined principally by the Federal Trade Commission’s Funeral Rule. The Funeral Rule requires that the goods and services selected at the conclusion of the meeting be itemized with costs. The intent is then to allow the individual to evaluate the selections so that he/she can make any desired changes.
Funeral homes must also comply with the Funeral Rule when selling funeral arrangements on a preneed basis. For guaranteed contracts, this would mean that an itemization statement may be incorporated by the preneed contract. To cut down on the paperwork prepared at the time of death, a funeral director may be tempted to resort to the statement of goods and services used for the preneed contract. While this practice is not prohibited by the Funeral Rule, several factual circumstances would make the practice a violation of the Rule.
The FTC website includes “Recent Funeral Rule Opinions”. The opinions include explanations about various fact situations that impact how the statement of goods and services must be prepared. For example, if the preneed contract includes cash advance funds, the funeral director must consider whether the original statement’s descriptions are still accurate. If the family changes any of the original selections (for example, a different casket is chosen), a new statement must be prepared. If the original statement includes a generic description of a casket, it may not comply with the Funeral Rule.
Using the preneed statement may seem a convenience in saving time and minimizing the stress of the arrangement meeting, but the better business practice would be to prepare a new statement of goods and services. The new statement of goods and services also serves to document the funeral home’s compliance with the terms of the preneed contract. With preneed audits looming in various states, funeral directors may regret the time they attempted to save in the arrangement meeting.
Depending upon Congress, theBereaved Consumer’s Bill of Rights Act of 2009 may impose the same Funeral Rule on cemeteries.