Mississippi Prepaid Funeral Law
A traditional funeral, consisting of a casket, flowers, church and cemetery service can become expensive. Prices for this service average around $6,000, and sometimes can go as high as $10,000 with extras such as obituary notices, flowers and limousines. Some people decide to pay for their funeral service in advance, removing the additional burden of financial stress from families who are immersed in grieving.
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Consumer Protection
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In the United States, consumers have lost millions of dollars investing in prepaid funeral plans. Cases of unscrupulous funeral homes mismanaging, losing or embezzling money prompted the Federal Trade Commission (FTC) to create the 1984 Funeral Rule. While the funeral rule provides some measure of consumer protection, it is broad in scope and does not address prepaid funerals. Individual states, including Mississippi, have laws specific to prepaid funerals, also referred to as pre-need contracts.
Pre-need Cemetary and Funeral Registration Act
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The Secretary of State of the state of Mississippi is responsible for overseeing laws related to pre-need, or prepaid funerals. This includes contracts or agreements for funeral services or funeral related merchandise. All contracts for these services must be written on forms that have been approved by and filed with the Secretary of State. Approved forms cannot be modified or altered in any way.
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Prepaid Funding Requirements
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In Mississippi, all prepaid funerals must be paid for with life insurance or a trust set up for this specific purpose. The contract should clearly state the number of payments and the exact amount of each payment.
A Pre-Need Contracts Loss Recovery Fund was instituted to help defray expenses suffered by families who were cheated out of prepaid funeral monies. Effective July 1, 2009, contracts that are paid for by trust add a $10 fee which supplements this fund. Insurance contracts do not include the $10 fee.
Trust Requirements
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In Mississippi, when a prepaid funeral contract is funded through a trust, a copy of the trust must be provided to the Secretary of State. The person who is named trustee of the trust fund may not be associated with or be the funeral service provider. Within five days of receiving the money for the services, a minimum of 85 percent must be deposited into the trust account. Upon death, if funeral merchandise and services are not provided as specified in the contract, the funds from the trust are given to the estate of the deceased within 10 days of the official death notification.
Insurance Requirements
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If a prepaid contract is paid for with insurance, all requirements of the insurance company must be met and the proceeds distributed in accordance with the policy. Sometimes an insurance policy can be purchased through the funeral service provider. In this situation, the funeral service provider is required to make timely payments collected from the purchaser for the insurance premium.
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