Few families want to talk about funerals. Most of us will be asked sooner or later. Should I pay for mine in advance?
The Short Answer
Know Your Rights First
The Federal Trade Commission’s Funeral Rule applies whether you arrange a funeral at the time of death or in advance. A funeral home must:
- give you prices over the phone if you ask, without requiring your name or a visit;
- give you a printed General Price List to keep, free of charge;
- show you a Casket Price List before it shows you caskets;
- give you an itemized statement before you pay; and
- let you buy only what you want, apart from one basic services fee.
You may also buy a casket elsewhere, and the funeral home cannot charge you extra for it. Embalming is generally not required by law (see the chart at the end of this post), except in some specific circumstances. The FTC’s consumer page is worth reading before you walk in. Then call three funeral homes and ask each for its General Price List. Prices for the same service can vary widely.
Guaranteed or Nonguaranteed?
A guaranteed contract means the funeral home provides the listed goods and services no matter what they cost later. In exchange, it keeps all of the proceeds. If the money grows beyond the funeral cost, the funeral home keeps the extra.
A non-guaranteed contract means your payment is applied to the retail prices in effect at the time of the funeral. Any leftover money goes to your estate or beneficiary. If the money falls short, your family may owe the difference, and the funeral home need not proceed until it has made payment arrangements it finds satisfactory.
Neither is automatically better. A guaranteed contract protects your family from price increases, but you give up any leftover funds. A nonguaranteed contract may return extra money, but it can leave a gap. If a contract guarantees only some items, it must say which.
NOTE: If you have a revocable trust, make your trust the beneficiary; otherwise, you may need to probate a reimbursement check made out to your estate! If the contract does not have a beneficiary designation (rare), assign the contract to your trust, or appoint the trust as a successor/alternate payee.
Watch the Cash-Advance Items
Even a guaranteed contract rarely locks in everything. Items the funeral home buys from others on your behalf, such as the obituary notice, flowers, clergy honoraria, and some cemetery fees, are almost never guaranteed. Ask for a written list of what is guaranteed and what isn't, and an estimate of the non-guaranteed items.
Where Your Money Goes
Trust-Funded Contracts
Under Ohio law, the funeral home must name a trustee that is a licensed trust company, a national bank or federal savings institution that pledges securities, or an authorized credit union. Your payments generally go to the trustee. The statute says the funds “shall remain intact and held in trust for the contract beneficiary,” and no money may leave the trust except as the statute allows. A few details matter to you:
- Fees: On a guaranteed contract, the seller may keep an initial service fee of up to 10% of what you pay. If you pay in installments, it may collect that fee only after you pay all installments.
- Confirmation: The trustee must notify you in writing within fifteen days of receiving your payment. The contract must also tell you to contact the trustee if you have heard nothing within sixty days of paying. Do not let that go.
- Payment: Write your check to the trustee or its depository, not to the funeral home. If the funeral home accepts a check made out to it, the statute requires it to pass the money along within thirty days.
- Separate accounting: Each contract generally has its own trust, unless you agree to a combined one. In a combined trust, the trustee must keep exact records for each purchaser.
Insurance- or Annuity-Funded Contracts
Here, your payments buy a life insurance policy or an annuity, and the funeral home receives the proceeds. The insurer must send you written confirmation within sixty days, and you must make payments payable only to the insurance company. The caution is cost and value. Insurance-funded plans often carry commissions, and early cancellation may return only the cash value, which can be less than you paid. Ask for the cash surrender value in writing. Missouri’s law carries the same warning.
What the Law Protects
Missouri law allows trust-funded, insurance-funded, and joint-account-funded contracts and requires the contract to identify the trustee, bank, or insurer.
The Worst Cases, and What Protects You
Most problems come from a few places: money never properly deposited, a contract that cannot be transferred, a new owner who will not honor the old price, or an arrangement that was informal from the start. Here is how to think through each risk.
Scenario One: The Funeral Director Dies or Retires
A small, family-owned funeral home often depends on one person. A death or retirement does not erase your contract, but a clear succession plan makes the difference. Larger firms tend to handle transitions more smoothly, though size alone is not a guarantee.
- Ask who will perform if the funeral director named in your contract is no longer there.
- Ask whether the contract lets the home substitute goods or services of “equal quality, value, and workmanship.” Ohio requires that notice. It is a normal term, but read what counts as equal.
- Ask who owns the business and what happens to prepaid contracts if it passes to heirs.
- Keep your copy of the contract, the price list, and the trustee or insurer confirmation. Your family must be able to prove the contract exists.
Scenario Two: The Business Closes
If the funeral home shuts down, the question arises: where is your money? This is where independent holding makes the difference.
- If the contract is trust-funded, your money is with a bank or trust company, not the funeral home. That's very different from handing cash to the owner.
- If the contract is irrevocable, you can designate a successor seller in writing. For a trust-funded contract, the trustee must confirm the change within fifteen days. A transfer fee of up to 10% applies only to guaranteed-price contracts, and it counts toward the same 10% cap as the initial service fee (Ohio Rev. Code § 4717.36). Insurance-funded contracts follow a similar fifteen-day process (Ohio Rev. Code § 4717.35).
- If the contract is revocable, you can cancel by written notice to both the seller and the trustee. After fifteen days, you may recover the trust assets, less permitted fees. On a non-guaranteed contract, that is generally everything less allowed expenses. On a guaranteed contract, they may hold back up to 10%.
The Ohio statutes do not lay out a step-by-step process for closing a funeral home. Do not assume anyone will contact you. Have a plan to act on your own.
Scenario Three: The Firm Is Sold or Merges
Funeral homes change hands often, and many are now owned by larger companies. A sale does not cancel your contract, but it raises questions.
- Ask whether the contract can be assigned to a buyer, and whether you must be told.
- If you have a guaranteed price, make sure the buyer’s obligation is in writing and that it honors your price. A guarantee is only as strong as the new owner’s willingness to keep it.
- A buyer may offer you a new contract. Do not sign one that cancels your old one without comparing the terms.
- Missouri requires a report to the board when a provider or seller sells business assets (see sections 436.490 and 436.500 in Chapter 436).
Scenario Four: Bankruptcy
Bankruptcy is where independent holding matters most. Money held by an independent trustee for your benefit is in a far better position than money the funeral home put into its own operating account. Ohio’s exemption from levy and attachment helps. It is not a promise that you will be paid in full if the seller fails. The remaining risk is failure to deposit, or a problem with the trustee or insurer.
That is why confirmation matters. The written notice from the trustee or insurer is your proof that the money arrived. If you haven't received it, assume nothing has been deposited and follow up in writing.
The Safety Net: Ohio’s Preneed Recovery Fund
Ohio’s preneed recovery fund, created by Ohio Rev. Code § 4717.41, reimburses buyers who lose money because a licensee committed wrongdoing, defaulted, failed, or became insolvent. The State Board of Embalmers and Funeral Directors administers it.
Treat it as a last resort. Payment is not a right. The board must approve each claim and may approve it in whole or in part. The fund pays only to the extent your loss is not already bonded or otherwise covered. Do not build your plan around it.
Prepaying and Medicaid
- Each person can exclude up to $1,500 in separately designated burial funds.
- An irrevocable prepaid burial contract is not counted as a resource. The portion that is burial funds reduces the $1,500 exclusion. The portion for burial spaces (cemetery lots) does not.
- A revocable prepaid contract is a countable resource.
- Burial spaces are excluded if the contract identifies the spaces and the seller’s obligation does not depend on further payments.
Burial Plots
A burial plot is a separate purchase, from a separate seller, under separate rules. In Ohio, the Division of Real Estate and Professional Licensing registers and oversees cemeteries, and a Cemetery Dispute Resolution Commission handles complaints.
The legislative summary of Ohio cemetery law is the source for what follows:
- The Plot Itself is not Protected Like Prepaid Goods: Ohio’s pre-need trust rules cover items such as markers, urns, and opening and closing services. They exclude burial lots and rights (Ohio Rev. Code § 1721.211). When you buy a plot, keep the paperwork that proves you own it.
- Merchandise and Services are Protected: The association must keep a set portion of your payment in trust until delivery or cancellation. The required amount is 110% of the seller’s cost, or 30% of the retail price of merchandise and 70% of the retail price of services.
- Maintenance is Funded Through Endowment Care: Cemetery associations must keep an endowment care trust, funded in part by a percentage of lot sales.
- If the Cemetery Fails: If a cemetery becomes defunct and the owner did not transfer it, title passes to the township or municipality. The Division can also ask a court to appoint a temporary receiver. Cemeteries must keep records of who owns burial rights and who is buried there.
- Complaints: You can file a written complaint with the Division. The cemetery has thirty days to respond, and a hearing must be held within 120 days of filing if the matter is unresolved. Use the Division’s cemetery complaint form.
Questions to Ask Before Buying a Plot
☐ Who owns the cemetery, and is it registered?
☐ What is the deed or certificate of ownership, and can I have a copy now?
☐ Can I resell the plot or transfer it to family? Are there costs and fees involved?
☐ What are the opening and closing charges, and are they included?
☐ Does the cemetery require an outer burial container? State law usually does not, though many cemeteries do.
☐ What are the rules for markers and monuments, including size, material, and installation fees?
☐ Is there an endowment care fund, and how is it held?
Cremation
Cremation is often less expensive than burial, but “cremation” can mean very different packages.
- No state or local law requires a casket for cremation. Funeral homes must offer alternative containers, such as unfinished wood or cardboard.
- Direct cremation, without a ceremony or viewing, is generally the lowest-cost option. Ask whether the price includes the crematory fee, and whether the crematory is independently owned.
- A service, a viewing, or a memorial is a separate line on the price list.
- Decide what happens to the cremated remains. A niche, a plot, and keeping them at home each have their own cost and rules.
- Direct cremation is also easier to move if you relocate. A prepaid cremation contract follows the same trust or insurance rules as any other prepaid contract.
- Someone must have the legal right to direct the disposition of your remains. In Ohio, that is addressed in Ohio Rev. Code Chapter 2108. A prepaid contract does not by itself decide who holds that right. If you have strong wishes, put them in a signed written designation, and talk to us about including it in your estate plan.
Headstones and Markers
You usually buy a headstone from a monument company or the cemetery, not the funeral home. The Funeral Rule does not cover third-party sellers such as monument dealers or a cemetery with no on-site funeral home, so you will not get the same price disclosures. Ask for a written, itemized quote that includes the stone, lettering, foundation, and setting.
- Rules: Check the cemetery’s rules before you buy. Many cemeteries limit size, style, or material, and some charge a fee to set the marker.
- Details: Put the design, material, inscription, and installation in writing, with a delivery date.
- Prepayment: If you prepay for a marker, treat it as a prepaid contract. Get confirmation that the money is held in trust or escrow until delivery. In Ohio, markers are among the pre-need items a cemetery must hold in trust under Ohio Rev. Code §1721.211.
- Worst Cases: If the monument company closes, the trust, or a state recovery fund where one exists, is usually your main protection.
Veterans: If you are a veteran with an eligible discharge, the VA may furnish a headstone, marker, or medallion. Apply with VA Form 40-1330 and a copy of the discharge papers. The VA help line is 800-697-6947. Spouses and dependent children buried in a private cemetery are not eligible for their own marker, but may be eligible for an inscription on the veteran’s marker. Ask the cemetery what it charges to set a government marker.
Another Option: Plan Without Prepaying
You don't have to pay a funeral home to plan. Many people write down their wishes and keep the money themselves, in a payable-on-death bank account, a joint account, or a revocable trust earmarked for final expenses.
The tradeoffs are plain. You keep control, can change your mind easily, and avoid a seller’s failure. But prices are not locked, your family has to find the money, and the funds may count as a resource if Medicaid is ever needed. Talk to us about whether this fits your plan.
Your Toolkit
Print these pages and take them with you.
Checklist 1: Before You Sign
☐ I called at least three funeral homes and asked for the General Price List.
☐ I know whether the contract is guaranteed or nonguaranteed, and exactly which items are locked in.
☐ I have a written list of cash-advance items that are not guaranteed.
☐ I know whether it is revocable or irrevocable, and what cancellation costs.
☐ I know if it is trust-funded or insurance-funded.
☐ I have the name and address of the trustee or insurer.
☐ I know the fees: initial service fee, cancellation fee, transfer fee.
☐ I know what happens to extra money, and who owes any shortfall.
☐ I know what happens if I move, or die away from home.
☐ I know what happens if the funeral home closes, is sold, or goes bankrupt.
☐ I was not pressured to sign the same day, and I read the whole contract at home.
☐ I am not signing blank lines or unclear terms.
Checklist 2: How to Pay
☐ My check is made out to the trustee or insurer, not to the funeral home, except for amounts the statute allows.
☐ I did not pay in cash without a receipt.
☐ I am not buying a policy I do not understand.
☐ I asked for the cash surrender value of any insurance policy in writing.
Checklist 3: After You Sign
☐ I received the trustee or insurer notice in writing.
☐ If I heard nothing within sixty days, I called and followed up in writing.
☐ I have a complete copy of the contract, the price list, and the itemized statement.
☐ I told my healthcare agent, executor, and family where the papers are.
☐ I gave a copy to my attorney.
☐ I will review the contract every few years, and after any move, sale of the funeral home, or change in my health.
Checklist 4: Cemetery and Headstone
☐ I have the deed or certificate of ownership for my plot.
☐ I know the cemetery’s rules on containers, markers, and fees.
☐ I have an itemized written quote for any headstone, with a delivery date.
☐ I checked VA eligibility if I or my spouse served.
Where My Plan Is
Copy this table onto one page and keep it with your important documents.
| Item | My Information |
|---|---|
| Funeral home name and phone | |
| Contract number and date signed | |
| Guaranteed or nonguaranteed | |
| Revocable or irrevocable | |
| Trustee or insurer, address, phone | |
| Date of trustee or insurer confirmation | |
| Cemetery name, plot location, deed location | |
| Monument company and quote | |
| Who holds the right to direct disposition | |
| Who has copies of this page |
Nine Questions to Ask Any Funeral Home
☐ Is this contract guaranteed or nonguaranteed? What exactly is guaranteed?
☐ Where is the money held, and who is the trustee or insurer?
☐ When will I get written confirmation, and from whom?
☐ Can I cancel? What do I get back, and what fees apply?
☐ If the contract is irrevocable, how do I transfer it if I move or the firm closes?
☐ What happens if the funeral director dies or the business is sold?
☐ Who performs the service if this home cannot?
☐ What happens if the money is more than the cost, or less?
☐ Does the price include the crematory fee, the cemetery fee, and any third-party charges?
- FTC: Funeral Rule and the FTC business guide to the Rule.
- Ohio R.C. 4717.32 to 4717.41 for prepaid funeral contracts and the preneed recovery fund. The State Board of Embalmers and Funeral Directors handles complaints about funeral directors.
- Ohio cemetery law summary and the Division of Real Estate cemetery complaint form.
- Missouri preneed funeral contract statutes, Chapter 436, including the complaint procedure in section 436.470.
- VA headstones, markers, and medallions.
- Funeral Consumers Alliance, a nonprofit consumer group.
