The Benefits and Protections of a Preneed Contract | Preplanning as a Part of Estate Planning
After the death of a beloved family member, there are countless details that need to be addressed. That’s one of the most compelling reasons to create and implement a clear and effective estate plan. It’s also a good reason for preplanning your funeral and burial. In the days and hours after your death, you want your loved ones free from unnecessary stress and anxiety, able to focus their energies on celebrating your life and experiencing their grief.
The Benefits of Preplanning Your Funeral and Burial
In Florida, a pre-plan is generally referred to as a “preneed funeral contract.” A preneed agreement offers many benefits:
- A high level of control—When you preplan, you get to make the decisions about your funeral and burial services, about monuments and caskets, and about how mourners can best memorialize you.
- The opportunity to pay all costs in advance—Not only will this alleviate uncertainty among your survivors, but preplanning can also lead to reduced costs, as you may have a hedge against inflation
- The reduction of stress for your survivors—According to one source, there are more than 70 items that need to be addressed after the death of a loved one. Taking care of those matters in advance can be a great gift to your survivors.
A preplan can provide additional benefits, if you’re a Medicaid or SSI recipient. With a preneed agreement, you can set aside money for your funeral or burial without impact on your eligibility for benefits.
The Legal Protections for Pre-Planning in Florida
No business may sell a preneed contract in the state of Florida with receiving a valid “Certificate of Authority.” To qualify for such a certificate, the business entity must either be registered as a direct deposit institution or must have a funeral or cemetery license. Any persons selling preneed contracts who are not licensed funeral directors must get a “preneed sales agent license,” and must be affiliated with the entity holding the Certificate of Authority.
There are three ways to secure the funds for a preplan in Florida—through the Preneed Funeral Contract Consumer Protection Trust Fund, a letter of credit or an individual insurance policy. The business providing the preplan must, by law, notify the purchaser how funds will be secured. The preneed agreement can include memorialization, interment, entombment or cremation.
In Florida, you can cancel a preneed contract and get a full refund if you do so within 30 days of the execution of the agreement. After 30 days, you may only get a portion of your funds back. There’s no requirement that the party holding the funds pay you any interest.
Should Your Estate Planning Include Preplanning Your Funeral?
Estate planning does not necessarily include funeral and burial planning, but there are advantages to doing so. Perhaps most importantly, preplanning will ensure that funds are available to pay for funeral and burial expenses when they are incurred. You can include provisions in your estate planning that certain assets will be used for that purpose. However, those funds are typically not available until your estate is settled, which can be weeks, months or even years after your death. It’s a better idea, when creating your estate plan, to determine how much you’ll need to cover funeral and burial expenses, and set up a Florida pre-plan for that purpose.
It’s also important to recognize that estate planning and preplanning share a common goal—to minimize the stress and anxiety experienced by your loved ones after your death. When you formulate an estate plan, you’ll get a clear picture of your assets and liabilities. You’ll know how much you have available for a pre-plan, as well as the potential impact of different pre-planning options. It makes good financial and emotional sense to combine your estate planning with a Florida pre-plan.
Gutterman’s—Compassionate Funeral and Burial Services for the Jewish Community in Florida
At Gutterman’s, we have provided comprehensive funeral and burial services to members of the Jewish faith in Florida for decades. We fully understand Jewish traditions and can assist you with every concern, from the details of the memorial service and burial to the selection of a monument, from the details of Shiva to the creation of a Yahrzeit calendar or choice of casket.
We know firsthand the challenges that the pandemic has presented to individuals and families who have lost a loved one. We are committed to strictly adhering to recommended public health safety guidelines, so that we can help minimize the spread of the virus. We will work closely with you to identify ways to honor Jewish customs, pay respect to the deceased, and stay safe. For a statement of the safety measures currently in place at all our chapels, visit our website.
To learn about a Florida pre-plan or about the many other ways we can be of assistance to you, contact us online or call us in Boca Raton at (561)997-9900 or toll-free at 1-800-992-9262. During the pandemic, we are available by phone, text message or videoconferencing. We will take your call 24 hours a day, 7 days a week.