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PreArrangements - Bud Noakes Commentary

Ocean Grove Memorial Home
118 Main Avenue, Ocean Grove, New Jersey 07756

Thomas J. Saragusa, Manager
N. J. License No. 4036

VOICE 732-775-0434 - - OGMHognj@aol.com

COMMENTARY by Bud Noakes

IN CONSUMER PROTECTION OF PRENEED FINANCING: THE NEW JERSEY STATE FUNERAL DIRECTORS' ASSOCIATION LEADS THE WAY...

If there is one subject on which all funeral directors agree it is of the advantages of making funeral arrangements in advance of need. These advantages have been pointed out by clergymen, the Federal Government, various social agencies, the Memorial Societies and by funeral directors themselves.

The only real disagreement concerns the methods of accepting the purchaser's money, how it is to be invested, how the purchaser's interests are to be protected and what expenses, if any, may be withdrawn by the sellers. It has long been the position of Mortuary Management [magazine] that all money paid to anyone in advance of death should be fully trusted...that no expenses of any kind, under any guise, should be deducted by the funeral director or cemetery from the amount paid by the purchaser without penalties of some kind being assessed...and that the purchaser should always remain in control of his or her money.

Approximately 36 states now [1982] require full trusting but so far as I know, none have come close to working out the extra-ordinary plan that has been instituted by the New Jersey State Funeral Directors Association. This plan, introduced in cooperation with a large New Jersey bank, was announced in 1981.

Named THE NEW JERSEY PRE-PAID FUNERAL TRUST FUND, the plan is the result of countless thousands of man-hours of thoughtful planning. The mere prospect of trying to get six hundred funeral directors plus bankers and lawyers to come together is a formidable task of the first order. But somehow it was accomplished and while everyone connected with it will benefit, none will benefit more than the consumers who elect to pre-pay funeral expenses.

The Pre-paid Funeral Trust Fund program has received extensive and favorable media coverage, not only in the United States, but internationally. While the contract is some 13 pages long, here are the main points:

1. All pre-payments are referred to as Advance Funeral Payments AFP). All AFP received by a funeral director are forwarded to the New Jersey State Funeral Directors Association which will forward the money to the bank after allowing time for checks to clear. The bank will pool the money received into a huge commingled account so as to take advantage of investment opportunities available to large investors.

2. Compliance with all state laws has been assured...FDIC insurance provides safety.

3. Each funeral home will receive bi-monthly statements showing the status of each client's account separately.

4. Current market rates of interest will be earned.

5. Upon servicing a funeral the funeral home will submit a statement and proof of death to the NJSFDA trustees who will in turn request the bank to pay the funeral director.

6. The NJSFDA trustees will receive one percent of the corpus of the fund annually to cover the expenses of administering the trust.

7. The trust will send to each purchaser the form, [K-1] within thirty days following the end of each calendar year.

8. The bank acts as independent contractor and not as a partner or agent.

9. According to the formal agreement for the pre-need funeral arrangements, the funeral director will furnish the funeral home's services and burial merchanse, as selected, if "reasonably available" when death occurs.

10. If on the date of the beneficiary's death there is insufficient funds in the funeral trust fund to pay for the services and merchandise at current prices, the balance of the cost shall be paid by the person making the funeral arrangements for the decedent. If there is an excess in the funeral trust fund the balance shall be paid to the purchaser or the purchaser's estate.

11. Nothing in the contract prohibits another party from adding to the funds contained in the funeral trust if they should wish to purchase additional services or merchandise.

So there it is! This is absolutely the finest plan for the prefinancing of funeral arrangements I have ever read. Everyone is protected. The plan is fair to all. It is reasonable in all aspects. It has the tremendous advantage of appealing to consumers who may be somewhat skeptical of paying in advance for services and merch- andise to be provided after their death. It is legal and in compliance with generally accepted banking customs.

If this plan was to be adopted by every state in the union, I honestly believe it would do more to maintain public confidence in funeral directors and funeral service than anything I can think of.

For further information please contact the following:
New Jersey State Funeral Directors' Association

Bud Noakes, Editor, Mortuary Management Magazine - May 1982

This may be an old reference but the facts are still valid.

Links to SECONDARY PAGES in this Master PreArrangement Partition:

Trust Funds - Sure Trust - Organ Donation - FAQuestions - Philosophy - PrePayment - SSI/Medicaid

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