The funeral industry may grumble about the FTC’s Funeral Rule, but two disclosures required by that law play important roles in the preneed transaction. The general price list is often used by funeral homes as a tool for comparing prices with the competition. And when a prearranged funeral is performed, the statement of goods and services
Preplanning
Recession and Preneed
By Bill Stalter on
The “R” word is back again. We’re only three years removed from the housing bubble burst, but a sense of normalcy seemed to be returning to the death care industry. It wasn’t necessarily a return to the old ways, not with the increase in cremations and regulations. But, many operators were coming to grips with…
Misinformation from the highest source
By Bill Stalter on
Posted in Preneed, Preplanning
The Wall Street Journal has long been viewed as a leading source of business and investment news. But last weekend, the WSJ ran a short article on preneed, and demonstrated its lack of understanding of the transaction.
The article attempts to characterize preneed as an investment, and then explores issues such as cash surrender…
Consumers: Reading the Bold Print
By Bill Stalter on
A recent news report titled “Broken Trust” served to fan the emotions of Illinois residents who purchased a preneed contract from the Illinois Funeral Directors Association. The facts involve a 103 year old lady who purchased the contract 16 years ago, and experienced a 32% drop in the contract’s value in one year.
When is the Spend Down preneed?
By Bill Stalter on
Posted in Preneed, Preplanning
A “Spend Down” is the transaction where a person seeking public assistance transfers money or insurance to a funeral home to avoid having the “asset” count as a resource. It is a commonly held perception that the Spend Down accounts for many preneed contract purchases. But should all Spend Downs trigger the state preneed law…
Setting Up Small Funeral Homes To Fail: Joint Accounts
By Bill Stalter on
Like most states’ preneed laws, Missouri’s Chapter 436 has always contemplated a depository accounts for the small funeral operator who provides preneed as an accommodation. Many funeral homes do not sell enough preneed to warrant the expense and hassle of either a trust or an insurance license. Chapter 436 allows the funeral director to place…
Picking Up The Tab For Death Care: Municipalities and Counties
By Bill Stalter on
Taxpayers, through their local governments, have always borne some of the cost of death care. Taxes go toward the maintenance of abandoned cemeteries and the final disposition of the indigent. But as the New York Times reports, the economy is causing more families to abandon the care of their dead to local governments. While many…
Trust Funded Preneed and Finance Charges
By Bill Stalter on
The funeral director’s decision about how to fund his preneed is influenced by the state’s trusting requirement, investment returns, administrative convenience and the volume of preneed business. Essentially, there are three methods of funding preneed: the depository account, the master trust and the insurance policy.
The funeral director’s use of the depository account predates all…
Would consumers purchase a non-guaranteed contract?
By Bill Stalter on
Regulators and preneed sellers squared off recently over the subject of who owns the preneed trust fund: the funeral home or the consumer. Hearings to reform Missouri’s preneed law hit a wall when the issues of trusting requirements, income accrual and portability was taken up by a review committee comprised of regulators, industry representatives and consumers.
In a debate…
NPS throws in the towel
By Bill Stalter on