This month’s article discusses the sale of pre-need funeral arrangements which are sold by funeral homes and cemeteries.  The contract is entered into whereby the customer selects the various features of a funeral and the various details regarding the final disposition of the body.

pre-funeral planning costsUnder Iowa law, such pre-need contracts can be cancelled by the customer within three days after signing the contract if you change your mind.  The contract can require either a lump sum payment or a series of installment payments.  If you elect to pay in installments, it is important to verify what happens in the event that you pass away before all the payments have been made.  Some contracts may contain an insurance feature that will allow you to have access to the full benefits even if you die before the installments were all paid.  Also, it is important to ask whether you can get your money back out of the plan if you need it for other purposes and what are the penalties you will pay by doing such.  Another important inquiry is whether the contract can be transferred if you move out of the area or leave the state.

Under Iowa law, the seller is required to place 80 percent of the purchase price of funeral services and merchandise and 125 percent of the wholesale cost of cemetery merchandise in trust.  Make sure to verify that the seller you are dealing with is complying with such requirements.  Pre-need funeral arrangements are an excellent way of making sure that your desires are followed regarding your funeral at the time of your death.  It also removes a potential financial burden from your family members.

By James D. Beatty