1) A mortuary trust can be either REVOCABLE or IRREVOCABLE. With a revocable mortuary trust you are able to cancel it and receive all of your money back plus interest that it has earned and you can transfer it to any other funeral home in the world. With an irrevocable mortuary trust you are not able to cancel it but you may transfer it to any funeral home that you desire. An irrevocable mortuary trust is not considered an asset when applying for Maine Care but consult your elder care attorney.

2) The mortuary trust can be a guaranteed trust or a credit for service. The State of Maine allows both but only a guaranteed trust will secure the price of funeral home goods and services at the time you set it up. A credit for service “may” guarantee the price when it is paid in full if the interest has kept up with the rising costs of the funeral home.

3) Funeral homes are required to set up a trust in the purchasers name with a bank that does business in the state you are purchasing the trust. The money is placed in a trust account and the funeral home has no access to it until the beneficiary has passed. They then send a copy of a death certificate to the bank and are issued a check.

4) Funeral homes do keep the interest earned on a guaranteed mortuary trust to cover the rising cost of the funeral but if that interest is not equivalent to the price increase then the consumer is NOT required to make up the difference, the funeral home is taking the risk that the interest will keep up with the cost.

5) If the funeral home goes out of business or decides that they are going to embezzle money your money IS protected because it is in a separate account in your name. Always make sure that you receive a letter from the designated bank saying that your trust account has been set up. NEVER make a check out to the funeral home directly just to the bank that is holding your trust.

6) Make sure that all items that are going to be included in the service are listed on the contract. The casket, the service fees, the vehicles, the flowers, the vault, the register book package, visiting hours, and any religious services. This will ensure that everyone knows exactly what you want and have paid for. If the items are not listed and it is just $5000 for a funeral that can be anything from a simple cremation to an elaborate funeral, nobody knows and it is left to assumption.

Planning a funeral in advance takes the stress and anxiety off of your family members when a person passes away but it can also add stress to your life if you are not with a reputable funeral home. Ask the questions of how long have you been in business? What bank do you do business with? How many trusts does your funeral home currently have? Do you have a physical location that you do business out of and where is it? How many families a year do you serve? All of these are questions that will help you to understand the company that you are doing business with and take the stress away from you as well.

First off when you set up a mortuary trust the money is placed into a trust account in your name, not the funeral homes name, so the money is always yours until you pass. The funeral home will then send a copy of the death certificate to the bank to get the money sent to them to pay for your funeral.

You cannot get a refund is another misconception. If the trust is set up as a REVOCABLE trust then at anytime you may get your money back and the interest that it has earned.

As far as interest on installment plans goes I would have to check on the State law, but I do know that Jones, Rich & Hutchins does not charge interest to the families that chose an installment plan to pay for their mortuary trust.

It is also State law that if you chose to transfer your account you can do that regardless of the type of trust, REVOCABLE OR IRREVOCABLE. All you have to do is send a letter to the funeral home that the trust is set up with and they MUST transfer that trust to the new funeral home.

If a funeral home closes you will not lose your money because again the trust is in your name. You would receive a letter from the funeral home and bank telling you they were closing and asking you what you would like to do with your money. Transferring it is usually the best thing to do but you could have it returned to you if it was a REVOCABLE TRUST.

Now that you have got my opinion on some of the misconceptions let’s talk about some of the advantages of preplanning and prepaying for your funeral.

1) The cost of the funeral homes goods and services are GUARANTEED not to increase. When setting up a trust make sure that it is a GUARANTEED trust and not a credit for service, which means that the price of the goods and services will never increase at that particular funeral home. You will receive the same merchandise or a step up if the merchandise is no longer being produced.

2) The money is safely put into a bank in your name and is protected from dishonest funeral homes or poorly run funeral homes that may go out of business.

3) The money is a protected asset when a person finds the need to apply for Maine Care and is not counted against your as an asset. This could help you when you have to go into assisted living or a nursing home.

4) Most importantly it eases the stress, anxiety, and difficulty from your family of having to make the difficult decisions that come with planning a funeral.

5) Lastly, you have no risk in the process because the funeral home is taking the risk that the interest will keep up with the rising cost of a funeral.

Don’t write off preplanning because there are some dishonest people out there, they are there in every profession and scare people away from the honest companies. The most important part is that you investigate the funeral home you are looking to do business with as well as the established laws that your state has. How long have they been around? What are people saying about them? Have they ever had any complaints filed against them? Make a smart and educated decision don’t avoid making the decision.