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WHAT’S INSIDE
1
Chapter 1: Advanced Funeral Planning, 2nd Edition
[4 CE hours] Advanced funeral planning is a general term with many facets. It is a decision that must be fine-tuned to the individuality, lifestyle, and religious base of each person. Many people plan for life events, such as weddings and vacations, well in advance. However, most do not plan for something that is certain to happen: their funeral. Further, many people are unaware of how expensive laying a loved one to rest can be. Assisting individuals in their quest to plan ahead significantly reduces the risk of leaving family members not only emotionally unprepared but also financially unprepared. This course is developed as a guide to help you, as a professional provider or agent, navigate the options that best suit all parties. Chapter 2: Opioids: Contributing to Both Health and Death, 2nd Edition 17 [2 CE hours] Opioids are pain relievers accessed through prescriptions. When someone takes too many opioids or reaches a tolerance threshold, an overdose occurs. With the increase of opioid deaths in the U.S., it is imperative for the death-care industry to recognize and respect the hidden dangers. The funeral arrangements, visitation, and funeral can be complicated because of the circumstances surrounding the death. Opioids can affect the vessels and tissues of the body and cause embalming issues for embalmers. Funeral directors and embalmers need to be aware of safety procedures before embalming and to incorporate strict personal protective equipment protocols. There are different embalming techniques for embalming an individual who was using opioids at the time of death as well as those who have overdosed on opioids. This course will also describe strategies to help combat overdoses in the funeral home.
Final Examination Answer Sheet
28
©2026: All Rights Reserved. Materials may not be reproduced without the expressed written permission or consent of Colibri Healthcare, LLC. The materials presented in this course are meant to provide the consumer with general information on the topics covered. The information provided was prepared by professionals with practical knowledge in the areas covered. It is not meant to provide medical, legal or professional services advice. Colibri Healthcare, LLC recommends that you consult a medical, legal or professional services expert licensed in your state. Colibri Healthcare, LLC has made all reasonable efforts to ensure that all content provided in this course is accurate and up to date at the time of printing, but does not represent or warrant that it will apply to your situation or circumstances and assumes no liability from reliance on these materials. i FUNERAL CONTINUING EDUCATION Book Code: FAR0626
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How do I complete this course and receive my certificate of completion? See the following page for step-by-step instructions on how to complete and receive your certificate. Are you an Arkansas board-approved provider? Colibri Healthcare, LLC’s courses are approved by the Arkansas Insurance Department - Arkansas State Board of Embalmers and Funeral Directors. Are my hours reported to the Arkansas board? Yes, Colibri Healthcare, LLC will report your hours electronically within two business days. What information do I need to provide for course completion and certificate issuance? Please provide your license number on the test sheet to receive course credit. Your state may require additional formation such as date of birth and/or last 4 of Social Security number; please provide these, if applicable. Is my information secure? Yes! We use SSL encryption, and we never share your information with third-parties. We are also rated A+ by the National Better Business Bureau. No problem, we have several options for you to choose from! Online at EliteLearning.com/Funeral you will see our robust FAQ section that answers many of your questions. Simply click FAQs at the top of the page, email us at office@elitelearning.com, or call us toll-free at 1-888-857-6920, Monday - Friday 9:00 am - 6:00 pm and Saturday 10:00 am - 4:00 pm EST. What if I still have questions? What are your business hours?
Important information for licensees: Always check your state’s board website to determine the number of hours required for renewal, mandatory topics (as these are subject to change), and the amount that may be completed through home study. Also, make sure that you notify the board of any changes of address. It is important that your most current address is on file. Disclosures Resolution of conflict of interest Colibri Healthcare, LLC implemented mechanisms prior to the planning and implementation of the continuing education activity, to identify and resolve conflicts of interest for all individuals in a position to control content of the course activity. Sponsorship/commercial support and non-endorsement It is the policy of Colibri Healthcare, LLC not to accept commercial support. Furthermore, commercial interests are prohibited from distributing or providing access to this activity to learners. Licensing board contact information: Arkansas Insurance Department Arkansas State Board of Embalmers and Funeral Directors 1 Commerce Way Little Rock, AR 72202 Phone: (501) 371-2600 Fax: (501) 682-0575 https://insurance.arkansas.gov/industry-regulation/funeral- services/embalmers-funeral-directors/
ii
Book Code: FAR0626
FUNERAL CONTINUING EDUCATION
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iii
FUNERAL CONTINUING EDUCATION
Book Code: FAR0626
Chapter 1: Advanced Funeral Planning, 2nd Edition 4 CE Hours
Course overview Advanced funeral planning is a general term with many facets. It is a decision that must be fine-tuned to the individuality, lifestyle, and religious base of each person. Many people plan for life events, such as weddings and vacations, well in advance. However, most do not plan for something that is certain to happen: their funeral. Further, many people are unaware of how expensive laying a loved Learning objectives Define advanced funeral planning. Identify advanced planning options. Recall the significance of ethical concerns and legislation in the death care industry. List the elements of an advanced planning or preneed contract. Advanced funeral planning is a general term with many facets. It is a decision that must be fine-tuned to the individuality, lifestyle, and religious base of each person. Many people plan for life events, such as weddings and vacations, well in advance. However, most do not plan for something that is certain to happen: their funeral. Further, many people are unaware of how expensive laying a loved one to rest can be. is endlessly complex. One Supreme Court justice said in a different context, “death is different.” The following provides a brief overview of early regulation and major trends in the history of the American funeral industry. By the mid-1950s, there were over 50,000 funeral directors and 25,000 funeral homes in the United States. Seventy percent of the country’s funeral homes at the time were independently owned, and many were organizing into a powerful trade group. While many state funeral directors’ associations had their own code of ethics, the federal government made no attempt to regulate the business nationally until the 1960s. This is when investigative journalist Jessica Mitford’s 1963 book, The American Way of Death, was published, which brought dramatic abuses committed by funeral homes to light. Mitford publicized already-existing concerns about the industry, accusing funeral homes of bilking stunned, grieving customers; pushing expensive caskets, funeral packages, and ridiculous “extras”; omitting less expensive options; and, in general, taking advantage of grief-stricken survivors. The book’s first edition sold out in just one day. Robert Kennedy was so moved by what he read in the book that he decided on a relatively simple funeral with a closed casket after the assassination of his brother, President John F. Kennedy. Even this was controversial: Public opinion strongly opposed Robert Kennedy’s (then the U.S. Attorney General) decision.
one to rest can be. Assisting individuals in their quest to plan ahead significantly reduces the risk of leaving family members not only emotionally unprepared but also financially unprepared. This course is developed as a guide to help you, as a professional provider or agent, navigate the options that best suit all parties.
Recognize the importance of Medicaid and how it affects advanced planning. Identify impairments and apply ethical practice in handling advanced planning for elder clientele.
INTRODUCTION
Assisting individuals in their quest to plan ahead significantly reduces the risk of leaving family members not only emotionally unprepared but also financially unprepared. This course is developed as a guide to help you, as a professional provider or agent, navigate the options that best suit all parties.
A brief history of the funeral ethics that shaped today’s industry The funeral industry , also known as the death care industry, has evolved along with Americans’ changing views. These views include what is appropriate and inappropriate in a funeral and in the death care industry. The subject of death
Mitford’s 1963 book, and the strong consumer response to it, prompted increased attention and introduced government oversight to the funeral trade. Hearings eventually culminated in the enactment of 1984’s Funeral Industry Practice Trade Regulation Rule (16 C.F.R. 453). The Funeral Rule, or “the Rule” as it is usually called, was reenacted and slightly modified in 1994. The Rule focuses on disclosures regarding funeral goods and services. Additionally, it specifies what a funeral business must include on a general price list (GPL), when the list must be offered, and what consumers cannot be required to buy. The Federal Trade Commission (FTC) is the government agency that interprets and enforces the Funeral Rule. The FTC has two central missions: to keep the marketplace competitive and to stop unfair and deceptive trade practices. The FTC act of which the Funeral Rule is one part broadly prohibits “unfair business practices and false advertising.” State rules also regulate funeral homes to various extents. In recent years, consumer attitudes about funerals have changed significantly, generally shifting away from traditional funerals. The internet, among other sources, allows consumers access to extensive information about funeral practices and options. Consumers can research their religious traditions and incorporate these traditions into their funerals. They can learn about federal regulations and industry conflicts. They can even buy their own merchandise, such as caskets, urns, and stationery, from a third party. This mainstreaming of the funeral industry is likely to continue.
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PART I: UNDERSTANDING ADVANCED FUNERAL PLANNING OPTIONS
Advanced funeral planning is the process of discussing, defining, and recording specific and unique funeral wishes with a funeral home provider before the services, ceremonies, traditions, and rituals are needed. These important choices and decisions are better made before the need arises, when one can think more clearly. Advanced planning options, also referred to as preneed arrangements or simply pre-arrangements, are by no means a new aspect of funeral planning. Preneed arrangements and prepayment of services began informally in the 1930s with oral agreements between directors and community members. Preneed contracts were part of “Main Street” business—discussed orally and sealed with a handshake. Advanced planning options include life insurance, final expense policies, funeral insurance, and funeral trusts. Each method has its own advantages and disadvantages. Life insurance A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit , to beneficiaries upon the insured’s death. Under the insurance-funded preneed contract, the consumer purchases a life insurance policy, and the policy proceeds are used to pay for the funeral. The funeral home is most times the insurance policy assignee and is paid directly by the insurance company after performance of the preneed contract. All cost increases incurred by the funeral home at the time of need are paid out of the benefits from the life insurance policy, up to the seller’s current price list. It is important to note that these arrangements involve two separate contracts: the preneed contract and the life insurance contract that is used to fund the preneed contract. Final expense policies Final expense policies are specifically designed to provide extra money to the decedent’’s family to cover his or her final medical expenses, burial costs, estate fees, or other costs incurred with the decedent’s death. At first glance, there appears to be very little difference between a final expense life insurance policy and an insurance-funded preneed contract, since both products provide death benefits to pay for funeral costs. However, there are two differences: First, final expense policies cannot be assigned to a particular funeral home. Second, the final expense policy must state that the policy’s death benefit proceeds are not guaranteed to be adequate to pay for all funeral needs. Funeral insurance Funeral insurance can be purchased as a preneed contract in an amount to pay for services, merchandise, and cemetery costs. If the costs are guaranteed, the insurance should cover all the expenses. Before funeral insurance is purchased, the customer should be told, in writing, exactly how much will be paid and what will happen if the insurance premiums are not paid. Trust-funded preneed contracts With a trust-funded preneed contract, a consumer purchases specific funeral services and merchandise at a guaranteed price from a preneed contract seller. A written contract that details the types of services and/or merchandise being purchased is required. The consumer pays the preneed contract seller a sum of money, either on an installment payment plan or in a single-payment transaction. The preneed contract seller is then required by law to place a percentage of these funds in a trust account with a qualified trustee. Both the NFDA and the FCA suggest that 100% of the funds be placed in trust, though state requirements vary.
Bank-held trusts Bank-held trusts or savings accounts are accounts that are established to pay for funeral expenses. It is up to the customer to let his or her family and the funeral provider know about the money in the account. The cost of funeral services and merchandise is usually not guaranteed with this type of account. Totten trusts Totten trusts (also known as “Payable on Death” accounts) are created when one party, the “settlor,” puts money in a bank account. Instructions, which name a beneficiary, are provided, and the beneficiary receives the money when the settlor dies. The trust money does not go through probate. AARP and other groups recommend a Totten trust, in some cases, as preferable to preneed contracts. Advocates of Totten trusts note cases where funeral homes have shut down or changed ownership and refused to honor a preneed contract. One disadvantage of a Totten trust is that if the beneficiary dies before the settlor, the gift lapses; no money remains. In addition, when a person with a Totten trust dies, the beneficiary must quickly contact the funeral home and make arrangements, especially if the person has not preplanned. Preneed contracts eliminate this stress; the funeral director takes care of all required procedures and the customer has chosen much of the merchandise or services he or she desires. Also, the beneficiary will likely pay more for the funeral than under a preneed contract. Finally, since Totten trusts are revocable: they cannot be used for Medicaid asset spend-down. AARP and other groups also state that preneed contracts have historically been invested poorly, thus yielding low returns. For example, one very large funeral home ran into financial trouble when it bought up independent homes whose investments were losing money. However, many states have addressed this issue by adopting rules that have tightened investment requirements; they specify how and where assets must be invested and prohibit the funeral director from acting as trustee. Trust or insurance? Consumer groups recommend that a funeral home provider offer both trust and insurance plans, letting the customer choose which option will work out best for him or her. In addition, the FCA suggests that the funeral provider or agent clearly lay out how much the trust and the insurance option would cost, using a hypothetical $5,000 funeral. This example would include how much the consumer would receive if he or she cancelled after one, three, five, and ten years, as well as the amounts of consumer funds that any other party receives. State-regulated trusts used to be the most common form of advanced planning financing. The customer pays the provider, and the funds are placed into a special account. The interest pays for the increased cost of the funeral, also known as the inflation, between the “lock-in” purchase time and the time of the funeral. If a customer is applying for Medicaid, he or she will need to render the money irrevocable by paying the funeral cost in a lump sum amount. Otherwise, most states specify that the customer has a choice of paying up-front or in installments. Most states stipulate that the funds must be entrusted to a financial institution or financial depository; some states specify that the trustee act prudently. A typical example is Massachusetts:
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Revocability versus irrevocability Understanding the two different types of funeral trusts is essential to choosing the right type for the needs of the consumer. Revocability, as its name implies, can be dissolved by the person who originally created it or by a designated person or entity at any time. The downside to a revocable trust or contract is that it does not receive favorable tax treatment and is not exempt from confiscation by hospitals, doctors, nursing homes, and other health care providers. Medicaid spend-down rules will be imposed on the trust before Medicaid-covered nursing home care is provided. Almost all states allow customers to cancel trusts or contracts, assuming the customer requests a revocable contract. Most states require the seller to refund the money within a specified period. In some states, however, the customer won’t receive a full refund; some states assess cancellation penalties. Although most states require all principal plus the interest, others exclude interest. Irrevocable trusts or contracts can’t be dissolved—by the creator or by any other designated entity. The funds can’t be accessed until the terms of the trust or contract are satisfied. This means that the death must occur before the assets are paid out. This implies that irrevocable trusts are superior in that they are not subject to Medicaid spend-down rules and the assets cannot be paid out until after the trust pays for funeral expenses. The FCA recommends that when a customer revokes, he or she receives 100% of the principal and the interest. The FCA also recommends that no preneed contract is made irrevocable as a condition of the contract and that if the customer elects irrevocability, he or she is to be allowed 15 days, in some cases 30 days, to think about the decision after signing. Further, the FCA recommends that a plain language version of the life insurance policy terms is given to the customer. Single pay versus multi-pay “Single-pay plans” are guaranteed issue, with no health questions asked. A face value is calculated at the agreement of payment. In most cases, the initial premium paid locks in the funeral cost, including goods and services, but generally excluding cash advances. Cash advances are products and services not controlled by the funeral home. Examples of cash advances include cemetery fees, death notices, and honoraria. “Multi-pay plans” are issuable based on a few simple health questions on the application. They are available with an immediate full death benefit or, for those with health issues, a modified benefit for the first one or two years, depending on the policy issued. Fluctuations in premiums are based on a person’s health history, age, and affordability of services. Guaranteed versus nonguaranteed A guaranteed advanced planning contract means that the funeral home accepts a customer’s payment as payment in full at the time of death for the goods and services that are selected in his or her contract. Survivors, or the deceased individual’s estate, will not have to pay out additional funds for guaranteed contracts. Certain items that the funeral home has no control over, such as cemetery costs and clergy honoraria, are typically not included in the price guarantee. State laws vary regarding guaranteed advanced planning contracts.
Chapter 203C: Section 3(a): “A trustee shall invest and manage trust assets as a prudent investor would, considering the purposes, terms, and other circumstances of the trust, including those set forth in subsection (c). In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.” The section goes on to list circumstances trustees must consider in each individual case. With life insurance, the purchaser is not taxed for interest income earned. However, the rate of return is usually lower than that of trust funds. Providers often receive a commission from the insurance company. A few states, such as New York, prohibit funeral directors from accepting preneed fund commissions from any third party, such as an insurance company or a trust fund. It is essential to advise the customer in writing where the funds are being invested. In many cases, these companies will have their own forms that require a signature, in addition to the forms required by the funeral provider or agent. In some states, it is required that consumers receive an annual statement with all important account information. It must also be disclosed who will receive interest from the funds. State laws vary regarding the amount the trustee must put in a trust fund. The NFDA and FCA propose that 100% must be put in; currently, 23 states have this requirement. Hawaii and Alabama require the lowest percentage: 75%. Many experts recommend 100%, even if one’s state requires less. Most of the media coverage about preneed consists of stories about greedy providers who spent the preneed money. This is an issue that justifiably concerns customers. Always complete the following: ● Advise potential customers to have the contract reviewed by an attorney or a trusted adviser before they sign it. ● Use a written contract: Most states require the preneed contract to be in writing, often providing forms the funeral director must, or may, use. Terms of an advanced planning or preneed contract An advanced planning contract should list all goods and services purchased and must be signed by both the provider and the customer. A third party with no knowledge of the goods and services purchased should be able to know these details just by reading the contract. The customer should receive a copy of it. The following items should be listed on the contract: ● Itemized goods and services on the preneed contracts. ● “Cash advance” items and cemetery goods and plots. ● At least 15 excluded goods and services, due to the inability to anticipate their need in advance (for example, preparing a body after autopsy), or that are provided by third parties whose costs may change, such as cremation fees. Whether their contracts omitted this disclosure or the purchaser didn’t comprehend it, the result is likely to be the same: angry consumers. ● Avoid potential problems by writing clear, detailed disclosures of possible charges. Require the purchaser to initial this disclosure to indicate he or she has been told this information. ● Several state statutes require contracts to further break down the monetary information. For example, Massachusetts requires the provider to designate the percentage of the total funeral costs attributable to goods and services that the funeral home provides, as well as the percentage attributable to goods and services that other suppliers or vendors provide.
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customer learns about his or her options for goods and services. He or she inspects the merchandise and the home’s facilities. Prepaying lifts burdens from loved ones by ensuring that a professional is lined up to handle what needs to be done right after a death, such as transporting, storing the body, and obtaining the needed certificates. In contrast, when a person does not preplan or prepay, his or her family must quickly make important and costly decisions while they are in the midst of intense emotions, including shock, grief, confusion, or anger. Grieving family members and friends may be unfamiliar with both the process and the role of the funeral director. They may feel uncomfortable asking questions. At the same time, they may be vulnerable to pressure from unscrupulous funeral homes, buying more expensive services and goods and spending money “to show how much they care.” They struggle with not knowing how the loved one wanted to be commemorated. These decisions can also create or exacerbate family conflict. An ethical and reputable funeral home and its provider will include the following: ● A detailed price lists of goods and services before the customer makes his or her selections. ● A written statement listing all of the goods and services selected and their prices. ● A written preneed funeral contract explaining, in plain language, the customer rights and obligations. ● A guarantee in the contract that if any of the selected goods or services are not available at the time of need, goods and services of equal or greater value will be substituted at no extra cost. ● An explanation within the contract of the geographical boundaries of the funeral home’s service area and under what circumstances the customer can transfer the preneed contract to another funeral home if the customer relocates, or if the death occurs outside of the service area. ● A statement in the contract as to where and how much of the funds will be deposited, until the funeral is needed. ● An explanation in the contract of who will be responsible for paying taxes on any income or interest generated by the preneed funds that are invested. ● A disclosure in the contract as to whether, and to what extent, the funeral home will guarantee the price of goods and services selected and purchased. If the prices are not guaranteed, the contract will explain who is responsible for any additional amounts that may be due at the time of the funeral. ● An explanation in the contract whether, and under what circumstances, a cancellation of a preneed contract can be requested and how much of the funds paid will be refunded.
A nonguaranteed advanced planning contract means that if the payment option selected is insufficient at time of death to cover the total cost of the funeral chosen, the survivors or estate must pay any difference. Preneed funds in excess of the actual at the time of need are usually refundable to the survivor(s) or to the estate; however, this is not true in all states. It is important to know and understand the rules in your state of practice. “Guaranteed” is a strong selling point for advanced funeral planning, and it does seem to save the consumer money. A survey found that preneed contracts cost families less than at-need ones. One reason for this, of course, is that prices of goods and services rise over time due to inflation. Another reason is that a customer preplanning his or her own funeral, especially an elderly person used to modest living, might choose less expensive options than his or her grief-stricken family. Funeral homes can offer preneed funding without a guaranteed price lock-in. In fact, a growing number of funeral homeowners and business advisors advocate ending guaranteed funerals or lock-ins entirely. According to a Funeral Wire article, customers simply don’t ask whether their preneed contract is guaranteed. If the provider or agent decides not to offer a lock-in price, he or she must be very clear to the customer, both verbally and in writing, that the preneed does not include guaranteed prices. If the provider or agent does offer it, the customer must be given a choice whether or not to “lock in” to a guaranteed contract. The value of advanced funeral planning There are many valid reasons to encourage advanced funeral planning. Consumer organizations concerned with funerals, such as the American Association of Retired Persons (AARP) and the Funeral Consumers Alliance (FCA), encourage preplanning. The process of making these arrangements can benefit both customers and their families. (We refer to the person considering or making a preneed contract as the customer or consumer throughout this course and the funeral home director as the provider.) Advanced funeral planning can be of great value to the customer. Elderly persons often struggle with issues of retaining and losing control. Some people see death as the ultimate loss of control; preplanning for one’s death allows the individual to confront these issues. Planning for the funeral offers an individual something tangible and important to organize and oversee. Having an opportunity to organize some aspects of how the individual will be commemorated can help him or her come to terms with relinquishing independence in other areas of his or her life. Additionally, families that preplan together tend to learn more about the preferences of the family member who is the customer. Preplanning, combined with paying ahead through a preneed contract, can offer the customer more control and peace of mind than simply preplanning. Ideally, the Advanced planning and medicaid One factor that has contributed to the popularity of advanced funeral planning and preneed contracts is its relationship to Medicaid, the federal health program. Medicaid, which was passed in 1965, covers healthcare costs for low-income people—including senior citizens who receive it as a supplement to Medicare. Each state administers Medicaid differently: It creates its own rules yet still obeys federal guidelines. Some states further break
PART II: GENERAL RULES, REGULATIONS, AND ETHICAL PRACTICES OF ADVANCED FUNERAL PLANNING
Medicaid’s administration down by administering Medicaid on a county level. For purposes of Medicaid eligibility, certain assets are considered exempt. An exempt asset is one that does not count as a resource in the determination of whether or not an applicant is eligible for Medicaid. A person may continue to own exempt assets and receive Medicaid coverage for nursing home care. Certain types of assets commonly used for a funeral, cremation, or burial are exempt under Medicaid.
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This fact further underscores the need for an attorney or a financial planner to look over a preneed contract. It also highlights the need for a funeral director to thoroughly understand his or her state’s rules and know how to look up the rules of another state if a customer dies there. Courts have proven that state advanced planning statutes are constitutional. In one case, a funeral service provider in West Virginia filed suit, arguing that the state statute regulating preneed contracts violated his constitutional right to free speech. He further claimed that the Funeral Rule preempted the state rule. The court held that the statute was constitutional because regulating advanced planning sales was an important state interest and the statute reasonably restricted preneed sales. It also stated that the Funeral Rule didn’t provide comprehensive regulation of the industry and did not conflict with the state statute, so the two were able to coexist. All funeral professionals are required to comply with the Funeral Rule when making both preneed and at-need contracts. If the survivors ask about goods and services, change the preneed arrangements, or must pay additional amounts of money (for example, in a contract that is non- guaranteed), the provider must provide them with the GPL and make all the disclosures required by the Funeral Rule. If the preneed contract was made before 1984 and has not been modified since, the Rule does not apply unless the survivors wish to change provisions of the contract. For example, if a person made a preneed contract in 1983 and dies now without changing any aspects of it, the funeral director does not need to make the now-required disclosures and otherwise follow the Rule. However, if the family wishes to buy a more expensive casket, the funeral director must comply with all provisions of the Funeral Rule. The FTC has focused strong efforts on conducting unannounced “sweeps” of funeral homes. Agents act as members of a family, or “shoppers,” in order to ensure a funeral home’s compliance with the law. Again, it is essential for any funeral professional to know his or her specific state regulations regarding funerals, embalming, preneed contracts, and Medicaid (each state has its own limit as to how much a person can put into a preneed account for Medicaid spend-down purposes). Additionally, there are often rules that specify that any money left after a funeral that is paid for from such an account must be returned to the state, not kept by the home or given to the beneficiaries. Penalties for businesses found in violation usually require violators to undergo training, participate in additional testing, and pay fines. Specific laws and guidelines may fall under the scope of different agencies. In Minnesota, for example, a rule under “Regulation of Trade Practices” prohibits insurance companies or agents from promoting a specific funeral home (§72A.325); Chapter 149A regulates mortuary science, licensing, and solicitation practices and contains the state’s version of the Funeral Rule, which is more stringent than the federal version. Chapter 525, the Uniform Probate Code, discusses who receives trust funds. Each state is organized differently. Designated agent and statutory obligation laws More than half of all states have enacted a personal preference law, a statutory obligation for survivors to honor the written wishes of the deceased (with the exception of cremation in a few states). In Ohio, for example, a person can specify that the arrangements of the preneed contract must be followed; a state-provided form is used. If a person doesn’t have details in mind but wants a specific person to make the arrangements, he or she can execute a declaration
For both Medicaid and SSI, certain types of funeral arrangements—including burial funds, prepaid funeral agreements, life insurance, and burial plots—are exempt from consideration as assets. In this way, an applicant can reduce his or her countable assets while also ensuring that his or her wishes about the planned funeral are respected. Unlike other asset transfers, a Medicaid applicant may set up a preneed trust before needing Medicaid. Customers in the past have typically requested traditional funerals, complete with embalming, casket, and funeral home services. Funeral conglomerates, in some cases, have been known to market these contracts aggressively. Many think advanced funeral planning works well in terms of Medicaid spend down. While some strongly advocate more consumer-friendly preneed requirements, existing research typically shows general satisfaction with most current regulations. Anecdotal evidence from respondents who represented state offices on aging, consumer advocacy groups, social service agencies, state attorneys general, and funeral directors’ associations considered current consumer protection regulations adequate. Only about one in five respondents had received any complaints about preneed policies, most concerning lack of transferability. Transferability In addition to losing money, the lack of transferability is the biggest problem preneed consumers report. As with every preneed aspect, state laws about transferability vary widely. Some states allow customers who move to another state to transfer funds, some do not; some allow the provider to charge for the service, some don’t. According to one article on the Maryland FCA’s website, a preneed consumer asked her provider what would happen if she died elsewhere. The provider answered, “around $1,500 to an outside funeral home to forward your body here, then another $1,500 to receive it. In addition, you’d have to pay the airfare, and weight counts. Of course, none of this is covered in your preneed guaranteed price.” The NFDA’s position is that a customer with an irrevocable contract should have the right to transfer but that the original provider can charge for it. The FCA’s position is that both types of contract ought to be transferable without penalty; if the second home is less expensive, the customer should receive the difference. Leftover money or a shortfall of money If the customer was on Medicaid, any leftover funds after the funeral go to Medicaid or to the decedent’s estate. Again, this is a state-by-state law. As of 1995, 12 states specified that the estate had to receive the money; many allowed the provider to retain it, some stated that it could be negotiated in the contract. If an individual lives in such a state, make sure that the customer understands what he or she is negotiating. Few states address the shortfall issue. One large chain’s policy is to not perform the contract unless it has been paid in full, which has probably not engendered goodwill. State regulation of advanced funeral planning State advanced funeral planning regulations are not uniform. They may or may not address specific issues of concern to the consumer. Complicating matters, states use different bodies to regulate state policy and may not specify who does what. While states such as New York and Connecticut have strong laws that cover many aspects of the preneed process, the District of Columbia has no law. Other states, such as Alabama, have very weak laws. Furthermore, there’s no reliable guide to current laws; as a provider, it is essential to research and understand your state’s individual statutes.
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Book Code: FAR0626
EliteLearning.com/Funeral
One funeral professional suggests that a director who obtains contact information from funeral attendees specifically ask them if they would like to be contacted. This professional also recommends waiting at least two weeks before contact and then emailing the request. He also advocates better use of technology, noting that many funeral homes lack websites that address the needs of recent funeral attendees. For example, the main page could include a menu item, such as “How Can We Help You,” and then direct site visitors to pages about posting online condolences, finding funeral service times, and requesting preplanning, if desired. Employees who resort to desperate tactics are often encouraged by places of employment that require agents to meet a preneed sales quota. Sales people receive incentives, commissions, or other rewards for sales. According to a law review article, one funeral conglomerate expects its new salespeople to average at least one dollar in every preneed sale for every at-need one; after six months, the ratio becomes 1.5 preneed for every dollar at-need. The same company rewards top sellers with prizes and vacations abroad. Salespersons that lag in their required preneed sales volume may be fired, even if their at-need sales are sufficient. Consumer groups look askance on preneed sales when salespeople are required to sell them by their employers. If one works for a company that implements these practices, it makes financial sense to comply with the company’s policies in order to retain a job, but in doing so one can also maintain his or her integrity. Consider the following scenario: You are meeting with an elderly person and her son in her large, well-decorated home. She is interested in purchasing a preneed arrangement. Neither mother nor son ask many questions or scan your written materials carefully. Do you emphasize the higher-priced goods and services because the more she spends, the better you’ll do at work? Or do you try to present the options evenhandedly and suggest that she take time to review her options and consult with an advisor? Ethical sales tactics related to preneed sales require tailoring recommendations to knowledge of the consumer’s resources. A well-informed consumer Funerals rank among the most expensive purchases many consumers will ever make. A traditional funeral, including a casket and vault, costs about $7,500–$10,000, although extras such as flowers, death notices, and cemetery property can add thousands of dollars to the bottom line. Every family is different in terms of their individual funeral preferences. Most funeral practices are influenced by religious and cultural traditions, costs, and personal choices. These factors help determine whether the funeral will be elaborate or simple, public or private, religious or secular, and where services will be held. They also influence whether the body will be present at the funeral, if there will be a viewing or a visitation, and if so, whether the casket will be open or closed. These factors will also determine whether the remains will be buried or cremated. Again, this is why the often-mentioned Funeral Rule is so important. The Funeral Rule, enforced by the Federal Trade Commission (FTC), makes it possible for the consumer to choose only those goods and services he or she wants or needs, and pay only for those selected—whether she or he is making arrangements when a death occurs or well in advance. The Rule allows a consumer to compare prices among funeral homes. It also makes it possible to select
of intent by assigning a representative the right to dispose of the person’s body in any manner the representative desires. The customer can thus designate the person he or she trusts the most—which might not be the same individual responsible under state law. It is wise to honor a customer’s written requests, even without a personal preference law. Courts tend to honor nearly all wishes. Ethical practices for advanced funeral planning Imagine that a customer discusses an important, expensive purchase, which relates to a subject that evokes strong feelings. The customer knows very little about his or her options and about how the planning process is executed. Some of his or her friends and family have chosen nontraditional products and services and have been satisfied with the results, but the consumer is not sure what these products were—or even their benefits and disadvantages. The agent knows all the tricks, but can the agent be trusted? Now, consider that the agent gives the consumer a price list written in a language that he or she can understand. The price list explains the meaning of terms that the consumer is not familiar with, and the font and type are large enough that he or she does not have to squint. The agent explains many of the options and appears even-handed, discussing the advantages and disadvantages of each. The atmosphere he or she creates relaxes, and the consumer is comfortable. The agent summarizes the discussion in writing and advises the consumer to review the options carefully and consult with his or her family and trusted advisors. The likelihood that this individual will utilize this provider is very high. On the contrary, some funeral chains or homes engage in unprofessional or inappropriate practices: They pursue customers by borrowing guest books at funerals to obtain contact information for funeral attendees. They approach persons visiting graves, call funeral attendees a few days after the funeral, and give gifts to intensive-care nurses and priests to entice them to recommend their home. One example published in newspapers nationwide concerned an outraged woman who wrote to “Dear Abby.” She explained that a funeral home where she had attended a funeral took her contact information and called her two days later, advocating preneed arrangements. These strategies tend to backfire: Potential customers (both Baby Boomers and Generation X) have become more savvy and better informed about funerals, as well as increasingly cynical and skeptical about pushy sales tactics. State statutes may limit how a provider or an agent contacts a customer. Some states, for example, prohibit paying money or other valuable considerations to secure business or obtain the authority to dispose of a dead body. An agent may not visit a hospital, a gravesite, or a visitation in order to solicit business without receiving a request from the solicitee. Without a specific request from the individual involved, he or she cannot solicit from a person about to die or, for a certain period of days after death, from the person controlling the decedent’s body. Some state statutes, such as that of Massachusetts, are broadly worded: They prohibit any attempts to sell preneed contracts in “false, deceiving, deceptive, misleading, coercive, intimidating, or threatening” ways [239 CMR §4.11(3)]. The Funeral Consumers Association recommends that funeral agents be prohibited from any form of solicitation, direct or indirect, of a consumer in a health care or retirement facility unless the consumer has explicitly requested it. (“Any form of solicitation” would include offering gifts to hospital personnel.) Furthermore, the FCA believes that a customer should be solicited by telephone, fax, or by email only if they have consented to it in writing.
EliteLearning.com/Funeral
Book Code: FAR0626
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● Specify each good and service not included in the contract. ● Clarify if the contract excludes cemetery services and goods. ● The GPL requires the provider to include separate prices for cremations and burials when the consumer provides the urn or casket. A provider is not required to emphasize this information or offer tips on comparison casket shopping. However, since the Funeral Rule was enacted, third-party casket and urn businesses have proliferated; many people have heard of the “Costco casket.” Using the internet, consumers have many choices at their fingertips. It makes sense to tell the customer that many third-party retailers offer merchandise. ● Keep your GPL prices current. The Funeral Rule requires the list have an “effective date.” ● The Funeral Rule says that a provider must inform customers when the price the provider charges the customers for cash-advance items is different from the cost the provider pays for them. It provides required wording for such cases. It is vital to add the required disclosures where the Funeral Rule specifies they must be. Do not change the punctuation, such as placing a sentence or part of one in parentheses, since punctuation may affect what the reader absorbs or ignores in the sentence. For example, according to 453.5(b) of the Funeral Rule, a funeral provider or agent is required to include the following statement: If you selected a funeral that may require embalming, such as a funeral with a viewing, you may have to pay for embalming. You do not have to pay for embalming you did not approve if you selected arrangements such as a direct cremation or immediate burial. If we charged for embalming, we will explain why below. Suppose a provider included this statement on your GPL, but put the second and third sentences in parentheses: If you selected a funeral that may require embalming, such as a funeral with a viewing, you may have to pay for embalming. (You do not have to pay for embalming you did not approve if you selected arrangements such as a direct cremation or immediate burial. If we charged for embalming, we will explain why below.) A reader might put less emphasis on the parenthetical statement. He or she might not realize that if the final remains will not be embalmed, he or she probably won’t need to pay for embalming. Comparison shopping Encourage customers to shop around and contact other service providers in the area. Prices for goods and services vary widely among homes. It is estimated that large chains charge up to 37% more for funeral services than independent or privately owned establishments. Connecticut, Massachusetts, and Minnesota require funeral homes to prominently disclose who owns the home; however, in the majority of states, a home does not need to disclose whether or not a chain has acquired it. (Chains usually have no incentive to reveal their ownership, wanting to capitalize on the “goodwill” of the name of a long- standing funeral provider, and not wishing to be linked with a chain. Therefore, when a town has a few homes, several which are owned by a large corporation, customers “shopping around” may not know that they’re visiting homes owned by the same company.)
the funeral arrangements the consumer wants at the funeral home of his or her choosing. (The Rule does not apply to third-party sellers, such as casket and monument dealers, or to cemeteries that lack an on-site funeral home.) Since the Funeral Rule became law over 20 years ago, it is increasingly accepted that consumers and readers of government documents should understand what they are reading. Government documents are not known for their clarity. The Funeral Rule, for example, has long sentences, is stuffed with information, and is difficult to navigate. It is ethical to write documents that consumers can understand. Many states have passed “plain language” rules for persons drafting government legislation and for service providers, such as funeral directors, who provide information to consumers. Texas, for example, requires preneed contracts to be clear and readable in both English and Spanish. These plain language principles, increasingly required by law in consumer transactions, are discussed in detail in Texas Administrative Code Title 7, Part 2, Subchapter A, Rule §25.4. The Department of Finance has written sample contract forms and requires anyone who sells preneed contracts to use their model contract or to submit their own contract to the Department for approval. Most states require preneed information to be presented in clear, concise language. The writer should choose everyday words and avoid complicated legal terms. If a complex term is necessary, an explanation of the term is required when it is first mentioned. Copying legal language from a document without explaining it is prohibited. Regarding style, sellers should use short, explanatory sentences whenever possible, include bullet lists, and avoid passive voice. The language must avoid repetition, wordiness, and multiple negatives, such as “this contract is not irrevocable.” In a passive voice sentence, the subject of the sentence does not perform the action, but instead receives it. For example, in the passive voice sentence, “This contract must be signed by the consumer,” the subject of the sentence is “Contract.” However, this subject does nothing; it merely gets signed. The reader may become confused because the subject does nothing; also, if the person or thing performing the action—here, “consumer”—isn’t mentioned in the sentence, the reader has no idea who performs the vital action. On the other hand, the active voice sentence, “The consumer must sign the contract” leaves no doubt. The Code explains that complex information becomes easier to understand when the seller uses a question-and- answer format or provides an example scenario. The seller should also group related points together when possible and should not repeat the same information at different points in the document. The Code even specifies fonts, font size, and margins. Refer to this useful statute as a guide when you draft written materials for the consumer. Of course, its content is tailored to Texas state law; your own state law will likely differ. A consumer-friendly general price list (GPL) The following suggestions, compiled from state statutes, the National Funeral Directors Association (NFDA), and other consumer group recommendations, offer possibilities for revising a GPL to make it clearer for the consumer: ● Clearly define what “goods” and “services” mean and the difference in how prices are handled. ● In any contract, identify all goods and services purchased so clearly that someone with no knowledge of these purchases will understand what they are.
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Book Code: FAR0626
EliteLearning.com/Funeral
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