Missouri’s proposed preneed records rule includes a provision that would require funeral homes to document the payment of excess funds:

  1. For all fulfilled preneed contracts:

 (3)   Records showing payments made to the state of Missouri or to any other person including the amounts paid, the dates paid and the name of the person paid; and

The State of Missouri has long asserted that funeral homes have an affirmative duty to determine when the preneed contract beneficiary was the recipient of public assistance, and whether the State has a claim on excess preneed funds.  Preneed contracts with price protection guarantees from the funeral home will not result in excess funds that are subject to state claims.  However, the marketing of final expense products is becoming much more prevalent, and such products frequently pay all proceeds to the funeral home.  If the proceeds exceed the funeral and burial costs, the state wants a record of the excess proceeds and who was paid.  Funeral directors may not want the duties that come with such products, but the state views the funeral home as having benefited from the spend down that gave rise to the preneed contract, and the exclusion of the life insurance policy or final expense trust from resource testing.