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Understanding your rights when pre-planning funerals in New York State

You don't have to pre-pay, but if you do, you should know your rights in New York State.
Elderly couple holding hands

BUFFALO, N.Y. — Many people want their last wishes known to their families, but a quarter of consumers haven't pre-arranged their own funeral wishes, according to the National Funeral Directors Association (NFDA). 

If you're hoping to make your last wishes known, there are a few things you should know about your rights in New York State.

In the 2018 NFDA Consumer Awareness and Preferences Study, 74.5 percent of people said it was very important to them that their funeral plans and wishes be shared with their family before they die. Yet only 25.5 percent have arranged part or all of their funeral in advance of their passing.

There's a difference between pre-planning and pre-paying your funeral, and in New York State, understanding the documentation you will receive when pre-paying can help you avoid being the victim of fraud or a scam. 

The AARP says that it's a smart idea to pre-plan your funeral wishes, which can be laying out how you would like your services to look. 

Although AARP says it may not be in your best interest to pre-pay for what you have planned, as your situation could change, or the funeral home you pre-paid with could go out of business. The AARP offers tips on how to pre-plan your wishes here.

However, if you are hoping to place your money with a funeral home for the expenses of your last wishes, you should know what to look for. 

According to the New York State Department of Health, if you have paid a funeral director as a pre-payment, the funeral director must notify you of where your money has been deposited within 30 days of the deposit.

You want to know where your money has been placed to ensure it has made it into a trust. It is state-mandated that funeral homes must put your money into a trust account for later use. 

You'll also see the location of your trust and the interest earned on your trust account on IRS form 1099-INT (or equivalent) which is sent in January of each year.

The Department of Health also recommends checking this information carefully, and says that if you provide written request, the funeral home must provide you with information on the total value of your account, including principal and interest.

The New York State Department of Health has a webpage with information about how to pre-plan your funeral and understanding the laws around funeral pre-planning. You can view it by clicking here. 

If you believe you are a victim of being defrauded of a pre-planned trust, you can also call or visit the website of PrePlan, a preneed trust management company, to verify your trust account. PrePlan's phone number is 800-577-3752, or you can click here to visit PrePlan's website.

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