We recently helped a family following the loss of their 91 year-old relative. Shortly after the death of her parents in the 1970’s, this lady, who had never married, took the initiative to buy her own cemetery plot. Having purchased the plot, she felt she had eliminated further worries and expense for her family. Rather than buying what the funeral industry calls a “pre-need plan,” she wrote out specific funeral arrangements for her family and left money to pay for those arrangements. Time proved this to be a better approach than the pre-purchase of the plot.
At the time of her passing, we assisted the family with funeral arrangements and the purchase of a casket, so they were able to stay within her prescribed budget. The cemetery plot, however, was another matter. A staff person at the cemetery informed our client of the $1250 “opening and closing” fee. The family really had no choice since she had already paid for this plot. Thus, a cemetery that had used her money interest-free for over 40 years now was able to extract an additional $1250 more from the distraught family.
So what are the morals to this tragic story?
1. If you have an elderly relative who already owns their plot, locate the contract and read the fine print about additional expenses so that you have time to consider your options.
2. If you cannot find the contract, contact the cemetery and request a copy. It is important to know your rights and obligations before the time of need.
3. If you are considering your own preplan, we strongly recommend that you purchase a standard life insurance policy that will pay for your funeral expenses rather than purchasing a “pre-plan” or other cause-specific policy. These policies often have big loopholes for the provider and plenty of restrictions on the buyer. Some insurance companies (State Farm for example) allow the beneficiary an early withdrawal of up to 60% of the policy proceeds once the insured has been medically deemed “terminal.” This provides the family with advance funding to make and pay for the necessary arrangements. Best of all, the beneficiary can make the arrangements without being hostage to any service provider.
This family learned another hard lesson when they asked about purchasing a headstone from a third-party. We will save that sad story for our next post!