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Be Smart, Cautious, and Prepared When Pre-Purchasing Your Funeral

It's very thoughtful to pre-arrange your funeral, just be smart when putting money down to pay for it.

It’s important to be very careful when it comes to pre-purchasing your funeral. Although this can be a responsible and altruistic gesture for your family, you also are potentially exposing yourself to some dubious behavior and inappropriate actions. Recently, a business in St. Louis going by the name “National Prearranged Services,” was indicted for stealing $600 million of pre-arranged funeral funds from families.

When it comes to at-need funeral arrangements (i.e. when someone dies) consumers are protected by the Federal Trade Commission (FTC). Sadly, pre-need arrangements do not fall under the same banner, and instead are state-regulated. These regulations vary significantly; Alabama, for example, does not have any laws whereas New York is very strictly regulated. Since the FTC cannot protect you, they offer you this advice.

Please, don’t let this stop you from pre-arranging your funeral. There are numerous benefits to planning ahead; you spare your family the burden of making difficult decisions at a trying time, you allocate the funds ahead of time, and you potentially lock in the present cost, thereby saving you a lot of money.

Like with any major purchase, do your research and go in armed with knowledge. For example, decide in advance whether you want a “revocable” or “irrevocable” account. Revocable allows you to take your money out at anytime, should your situation change; irrevocable locks in the cost but doesn’t allow you to take the money out of the account. (Note: many also use this type of account to qualify for Medicaid.) Shop around and find the funeral home that you feel most comfortable with. Also, ask the questions such as, what happens if you move? What if the funeral home goes out of business? Do they have any guarantees?

Although there are scandalous acts associated with pre-funded funerals, it's still one of the best ways to get the funeral you want.

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