Washington State Regulation of Prepaid Funeral Plans
Prepaid funeral plans are designed to ease the burden of funeral expenses and the headache of planning funeral arrangements during a highly emotional and stressful time in your life. Prepaid funeral plans come with contracts, so be sure that you are making an educated decision regarding the services of the establishment you choose. Regulations of prepaid funeral plan contracts are not standardized across states, so check your state's guidelines before making any obligation.
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Function
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The AARP website states that "individuals prepay for funerals and burials by entering into a preneed agreement, or contract, to pay in advance for goods or services they will receive upon death. Generally, this agreement is between the individual and the funeral director or cemeterian, and is funded through a funeral trust, annuity, or insurance policy."
Benefits
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Individuals and families may believe that prepaying for a funeral plan may be in their best financial interest. A funeral or burial service is a large expense that can be difficult to pay if you are caught unawares. While death often comes as a surprise, the cost of saying goodbye doesn't have to be. Making and funding arrangements in advance will take away one burden during the grieving process so you can focus on what is important.
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Registration Requirements
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The Washington state legislature requires that funeral home establishments be board-certified by the board of funeral directors and embalmers before participating in prepaid funeral plan contracts under certain conditions. An establishment is required to register, for instance, if the agreement has monetary stipulations surrounding insurance or trust that will be used to pay for the services being offered. The application and appropriate fee must be sent to Washington's Department of Licensing.
Customer Contract Requirements
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The funeral establishment must submit a draft of the prearrangement funeral service contract to the Department of Licensing for approval before the contract may be issued to customers. The Washington state legislature requires that contracts provided by funeral home establishments to the consumer be written in language that is easy to understand and list the required information that should be present in every prearrangement funeral contract. Required information includes, but is not limited to, the name of both parties, a description of services, date and monetary stipulations.
Trust Agreement
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Funeral home establishments that do not use insurance as a source of funding must enter into trust agreements for the prearrangement services by order of the Washington state legislature. The trust agreement covers such terms as trustee selection, monetary arrangements, details of services and trustee responsibilities. The trust agreement must also clearly state that a customer must receive a full refund if the contract is canceled within thirty days.
Warning
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You should never enter into a contract or any form of legal agreement in which you feel uncomfortable or have unanswered questions. If the funeral home establishment is reluctant to answer your questions to your satisfaction regarding the terms of its prepaid funeral plan contracts, take your business elsewhere. Statewide Legal Services states that prepaid funeral contracts can be revocable, contract can be canceled with a refund, or irrevocable, contract cannot be canceled but may be transferred to another funeral home. Be sure to question the consequences of terminating your specific contract.
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References
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