After a loss

Prepaid funeral plans: what to check before buying

They can help. They can also go wrong if nobody reads the details.

A prepaid funeral plan lets someone choose and pay for their funeral ahead of time. It can take pressure off family. The FTC suggests asking a few questions before signing.

Questions people commonly ask

• Exactly what's included, and what isn't, such as cemetery costs or flowers
• Whether the price is locked in or could go up later
• Where the money goes: a trust, an insurance policy or the funeral home itself
• What happens if the person moves, or the funeral home closes or is sold
• Whether the plan can be cancelled, and how much would be refunded
• Whether the plan can be transferred to another funeral home

Protections vary

States regulate prepaid plans differently. Some require the money to be held in trust. Others offer fewer protections. State attorneys general and funeral boards often publish guides.

Alternatives some people use

• A payable-on-death bank account set aside for funeral costs. The named person gets the money directly, without waiting for probate.
• Life insurance with a named beneficiary
• Writing down wishes without paying anything yet

Some people on Medicaid, or expecting to need it, use an irrevocable funeral trust, money set aside for the funeral that can't be taken back, which usually doesn't count against Medicaid limits. Rules depend on the state.