Planning Ahead

Before signing any pre-payment contract, you should address this question with the funeral provider. Laws vary from state to state, but in general, should the funeral home go out of business, they are obligated to return your money (with interest), or transfer the funds to another funeral home. You will need to give the funeral home written authorization to transfer your contract to another funeral home.

In the event there was not proper trusting of funds by the company, contact consumer services in your state. It may be possible to file a claim against the provider.

Get complete information on available benefits and eligibility criteria at benefits.va.gov/benefits.

The Department of Defense (DOD) is responsible for providing military funeral honors. The Department of Veterans Affairs (VA) National Cemetery Administration cemetery staff assist with military funeral honors at VA national cemeteries.

Since the passage of the National Defense Authorization Act in 2000, every Armed Forces veteran and member on active duty or in the active reserve has the right to be buried with patriotic flourishes provided by a military honor guard.

Upon the family’s request, every eligible veteran will receive a basic military funeral honors ceremony. This ceremony includes members of the military serving as pallbearers, the folding and presentation of the United States burial flag, and the sounding of Taps, at no cost to the family. In certain instances, a rifle volley, or 21-gun salute, is also included in the ceremony.

The DOD program calls for the funeral home provider to request military funeral honors on behalf of the veterans' family.

View the full U.S. code regarding military honors.

You will need to provide the funeral director with a copy of your loved one’s military discharge papers, or DD 214/Separation Documents. This document is necessary to establish proof of eligibility for burial benefits. If you do not already have a copy of the discharge papers, you can request them online.

Read more about VA burial benefits.

The VA will provide a standard headstone or grave marker at no cost to the family. Read specific information on headstones and markers.

This engraved paper certificate honors the memory of the deceased veteran, and is signed by the current President of the United States. Eligible recipients include the next of kin and loved ones of honorably discharged deceased veterans. More than one certificate may be provided.

Read instructions on how to request a certificate.

For the purpose of receiving burial in a national cemetery, a “veteran” is defined as one of the following:

• Someone who is currently serving, or has served, as a member of the Armed Forces (Army, Navy, Air Force, Marine Corps, Coast Guard)
• Members of Reserve Components and Reserve Officers Training Corps
• Commissioned Officers, National Oceanic and Atmospheric Administration
• A Commissioned Officer of the Regular or Reserve Corps of the Public Health Service
• World War II Merchant Mariners
• The Philippine Armed Forces

Read detailed information on determining veteran status as it pertains to funeral benefits.

In order to qualify for Medicaid, an individual must meet specific requirements regarding the amount of available assets they own. If you have too much income to qualify, some states let you "spend down" to become eligible for Medicaid.

Choosing and paying for an irrevocable funeral, or burial, trust helps to reduce the amount of assets, and its purchase doesn't violate Medicaid's 60-month asset transfer rule (or in California, the 30-month asset transfer rule). It also ensures that the Medicaid recipient has provided for their final arrangements.

Note that irrevocable funeral trusts are not all the same as pre-paid or pre-need funeral plans, and not all are considered Medicaid exempt assets. Also, as the name suggests, once you enter into the trust, it can't be dissolved.

Read more about irrevocable funeral trusts.

Call your state Medicaid program to see if you qualify and learn how to apply.

You should clarify this at the time you choose a plan. Be sure that the plan stipulates in writing if it is transferable or not.

The funeral home can advise you of different preplanning options and set you up with a plan of your choosing. Once you choose a plan, the funeral home will keep your contract on file in readiness for the day that services are needed.

You have a few options to fund your pre-paid plan through insurance.

1. Purchase funeral insurance from an insurance company.
   You can purchase a policy that typically ranges from $3,000 to $15,000 from an insurance company, made payable to a beneficiary immediately after your death. These funds do not go through probate. The money is intended to cover funeral expenses, but can be used in any way the beneficiary wants.
2. Purchase an insurance policy or trust through a funeral provider.
   If you purchase a policy or trust through a funeral home, you will have to specify a number of details such as the particular funeral home and the specific products and services you want. This plan will only cover those products and services directly provided by the funeral home, such as the casket, urn, and use of the funeral home chapel. Outside items, such as floral arrangements, clergy fees, and cemetery fees, would not be covered. With this plan, the funeral director acts as an insurance agent and receives a commission on the sale of the policy or a fee for setting up the trust. The beneficiary on the insurance policy and trust is the funeral home.
3. Purchase a life insurance policy from an insurance company.
   You may use the benefit from any term or life insurance policy to pay for funeral expenses. If you need insurance money only to pay for funeral expenses, you can purchase funeral insurance from an insurance company in smaller amounts than what is typically offered in a term or whole life policy. At your death, the money passes automatically to the named beneficiary without having to go through probate. The money is intended to cover funeral expenses, but can be used in any way the beneficiary wants.

Preplanning involves making decisions in advance on the services and burial or cremation plan you want, and choosing a funeral provider. This is done for a number of reasons: to spare your family the stress and cost of making funeral arrangements at the time of need, to share how you wish to be memorialized, and to pay at current prices.

The pre-need contract must be paid in full or in installments you've agreed on with your provider. Contracts can be either revocable or irrevocable, depending on the agreement.

Preplanning your final arrangements has a number of advantages:

• You can document how you'd like to be memorialized, so your loved ones and funeral provider can fulfill your final wishes.
• It relieves your survivors of the responsibility for making financial and logistical decisions during a stressful and emotional time.
• Paying for services at current prices may save money, as prices are likely to rise over time.

A revocable pre-arrangement contract can be cancelled or “un-funded” at any time, and the released funds can be used for any purpose. If the revocable pre-arrangement was funded with a bank trust, your principal plus all interest will be refunded to you.

If your revocable pre-arrangement was funded with an insurance policy or annuity, the cash surrender value, less surrendered charges, will be returned to you.

When preplanning, if you want the flexibility of a revocable contract, be sure sure that's what you're getting from the funeral provider.

Yes. Most funeral homes offer a pre-payment option, where you select the services and designate your choice of final arrangements.