week4

Question 1

Preplanned vs. prefunded contract

Answer 1

1. both involve meeting with licensed director
   - exclude funeral insurance, burial insurance, savings/trust accounts, benevolent insurance, etc.
2. arrangement
   - preplanned NOT FUNDED
3. contract
   - preplanned and prepaid/FUNDED

Question 2

legal effect on funeral director

Answer 2

1. arrangement
   - suggestion, not binding
2. Preneed contract
   - depends on state statute; bound to perform
   - absent statute; non binding
   - -statute ; WVA Preneed; OHIO preneed

Question 3

Preneed contract

Answer 3

1. arrangement
   - funeral services
2. financing
   - payment
   - -trust
   - –beneficiary ; different director
   - –fiduciary
   - -insurance

Question 4

4 types of Preneed contracts

Answer 4

1. revocable trust
2. irrevocable trust
   - qualified for medicaid
   - spend down
   - issue- refund
3. guaranteed contracts
   - use of statements of goods and services
4. non guaranteed contracts

Question 5

additional funds and accounts

Answer 5

1. bank/financial institution accounts
   - joint ownership
   - tod, pod, etc.
2. escrow account
3. burial l insurance
4. funeral insurance
5. private entrepreneurs

Question 6

special issues

Answer 6

1. tax issues
2. cash advance items
   - non guaranteed
3. portability ; allows a family to go from one director to another

Question 7

Preneed regulatory compliance

Preneed statutes

Answer 7

1. federal
   - not dedicated for Preneed
   - statute applies to all funeral contracts
2. state
   - does not supersede federal statutes
   - state statutes expand/add requirements on Preneed
   - wide array of requirements

Question 8

Preneed arrangement conference

Answer 8

1. enforceable agreement between:
   - funeral establishment and purchaser
   - preplan and prepay
   - signed agreement
2. beneficiary
   - may be purchaser

Question 9

FTC cooling off rule

Answer 9

1. FTC cooling off rules applies if;
   - conference location to purchase “refunded funeral arrangement” is other than at funeral establishment
   - notice of right to cancel within 3 business days
2. FTC cooling off rule doesn’t apply if;
   - location is at the funeral establishment
   - FTC funeral rule applies whenever/wherever arrangements are being made whether paid or not both pre and at need

Question 10

FTC funeral rule and preneeds (2)

Answer 10

1. requirements apply
   -all Preneed cases
   -prepaid or only preplanned
   -also, after death
   -after Preneed if survivors
   -inquire about goods or service
   -alter Preneed
   -requireed to pay additional sums of money
2. all at need cases
3. provide
   GPL
   CPL and/or OBCPL
   -statement that embalming is not usually required
   -statement of funeral goods and service selected
   -non declinable basic services fee
   –direct cremation, immediate burials, forwarding or receiving remains
   -cash advances