Home
In this issue
April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

Prepaid funeral plans can be a R.I.P.-off

By Eleanor Laise





Paying ahead for your funeral might seem ideal, but be forewarned. Prepaid plans often come with unexpected costs


Tom Waggener remembers how pleased his parents were when they told him 15 years ago that they'd prepaid for their own funerals.

"It was so satisfying to them" to think that their children were relieved of the burden, says Waggener, 65, a retired state employee who lives near Taylorsville, Miss.

But after Waggener's mother died in 2006, the funeral home gave his family a bill for more than $10,000. It attributed the extra cost to a special order for the casket she had chosen, which was no longer in stock.

"It was an unpleasant business," Waggener says. "I really don't think prepaid funerals are a good idea."

Paying for your own funeral in advance sounds like an ideal way to spare your survivors some stress and expense. But a growing number of consumers are finding that these "pre-need" funeral arrangements can come with unexpected costs and, all too often, outright fraud. A slew of recent state and federal investigations have uncovered everything from excessive fees levied on prepaid funds to misappropriation of the money.

Though statistics on the industry's size are hard to come by, the alleged losses in some of these cases suggest that prepaid funerals are very big business. In indictments late last year, the U.S. Attorney's Office in the Eastern District of Missouri claimed that mismanagement of prepaid contracts sold by National Prearranged Services had cost contract purchasers, funeral homes and state insurance guarantee associations $450 million to $600 million.

Burton Shostak, a St. Louis lawyer representing Randall Sutton, the indicted former president of National Prearranged Services, declined to comment, since the matter is ongoing. (The company, based in Clayton, Mo., collapsed in 2008.)

Many people who prepay for their funerals believe "that they've magically waved away any potential problems for their survivors, when in fact usually the opposite is true," says Joshua Slocum, executive director of Funeral Consumers Alliance, a consumer advocacy group. About one-third of the complaints the group receives involve prepaid funerals, Slocum says.


FREE SUBSCRIPTION TO INFLUENTIAL NEWSLETTER

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily update. It's free. Just click here.


Yet some funeral directors say that consumers' interest in prepaying for funerals is only growing stronger. One factor: rising funeral costs. The average adult funeral cost $6,560 in 2009, the most recent data available, up from $5,180 in 2000, according to the National Funeral Directors Association. And those figures don't include cemetery and monument costs. Many funerals cost well over $10,000.

Prepaid funeral contracts come in several flavors. Buyers can make these arrangements directly with a funeral home, as Waggener's parents did, or with a prepaid contract provider that works with a number of funeral homes. Depending on the contract, you pay in a single lump sum or in periodic installments.

A "guaranteed" plan promises to provide the goods and services selected, no matter how much prices rise, while nonguaranteed plans don't offer this protection -- meaning your survivors may need to pay more when the services are provided. The funeral home may deposit prepaid money in a trust or send it to an insurance company, and the money is released to the funeral provider upon the beneficiary's death.

The funeral industry says the contracts are a good value because they provide peace of mind and allow consumers to lock in the price of a funeral years in advance.

"Prepaying a funeral is the best deal going for the consumer," says Bob Arrington, a funeral director in Jackson, Tenn., and spokesman for the National Funeral Directors Association. As for the recent investigations into mismanagement of prepaid funds, he says, "every industry has got some black eyes."

THE CONSEQUENCES CAN BE GRAVE
Yet even when prepaid contracts stay within the letter of the law, they can hold nasty surprises, consumer advocates say. One reason: There's a hodgepodge of state laws offering varying levels of consumer protection.

Florida law requires as little as 70 percent of money prepaid for services and 30 percent of the retail cost of caskets and other merchandise be put in a trust. The funeral home can take charge of the remaining funds. If you move or simply change your mind and cancel the contract after the first 30 days, the funeral provider doesn't have to provide a refund for the merchandise cost. In West Virginia, the contract seller can pocket 10 percent of the prepaid money if the consumer backs out.

People who feel they need a prepaid contract -- if only for peace of mind -- should ask a lot of questions first. Find out if your money is going to a bank or insurance company, and ask for regular statements from the financial institution holding the funds. Ask what penalties you may pay for canceling the contract.

You do have options that may be simpler and safer than a prepaid contract. You can plan your funeral without plunking down a dime. Under Federal Trade Commission rules, funeral directors must give you itemized prices for goods and services. Though many funeral homes offer packages, you have the right to purchase items a la carte. Make a list of your preferences, and give a copy to loved ones or a lawyer.

And if you want to set aside money for your funeral, you don't need to relinquish control of the assets. You can set up a payable-on-death account with your bank, naming one or more of your survivors as beneficiaries.

That's what Irene Hicks wishes she'd done 15 years ago. Hicks and her husband, Thomas, purchased prepaid funeral contracts for themselves in 1996 from F.E. Runner Funeral Home in Elkins, W.Va. About 10 years later, they also bought a prepaid contract for their disabled son.

In late 2006, Hicks called the bank that was supposed to be holding the prepaid money and learned that the funds for her husband's contract had been withdrawn a couple of years earlier. Yet her husband was -- and remains -- very much alive and well.

"He's 77 and still riding a motorcycle," says Hicks, who now lives in Crystal River, Fla.

In a complaint filed against the funeral home and its owner, Cheryl Runner, in 2007, the West Virginia attorney general charged that Runner had forged Thomas Hicks's death certificate and took his funeral money. What's more, Runner had never deposited prepaid funds for the Hickses' son in the bank but instead cashed the check, the attorney general said.

The court found in favor of the attorney general and ordered all open prepaid funeral contracts with F.E. Runner relinquished to the state. Runner did not respond to requests for comment. The Hickses ultimately recovered the prepaid funds.

Sign up for the daily JWR update. It's free. Just click here.

Interested in a private Judaic studies instructor — for free? Let us know by clicking here.

Comment by clicking here.

Eleanor Laise is Associate Editor, Kiplinger's Retirement Report.



All contents copyright 2013 The Kiplinger Washington Editors, Inc. Distributed by Tribune Media Services. All rights reserved.

Quantcast