Frequently
Asked Questions (and Answers) about funeral contracts in Connecticut
What is a pre-paid funeral
service contract?
In Connecticut a funeral service contract is defined
by law as a "contract which requires the payment of money or the delivery of
securities in exchange for the final disposition of a dead human body...." This
may include the funeral, burial or other services, or the furnishing of personal property
or funeral merchandise in connection with the disposition of the body. The service is not
required immediately.
What is the
difference between a "revocable" and "irrevocable" contract?
An "irrevocable" contract means
you can not cancel the contract and get your money back. You can, however, transfer
an irrevocable funeral contract to a different funeral home if you wish. By state
law, "irrevocable" funeral contracts cannot exceed $5,400.
A "revocable" contract means you can
cancel the contract and get some of your money back.
What kinds of funeral
service contracts can I have and still be eligible for Medicaid (Title 19)?
- You can have an irrevocable funeral contract (also known
as an irrevocable "burial fund") up to $5,400.
- You can have a revocable funeral contract (or "burial
fund") up to $1,800, however, any irrevocable funeral contract and the face value of
life insurance policies not counted as assets under Medicaid will offset this $1,800 asset
exclusion. (The excluded amount is $1,500 if one spouse is institutionalized.)
It is not possible to have both a $5,400 irrevocable funeral contract and a $1,800
revocable funeral contract (burial
fund) under Medicaid, although it is possible to have much lower amounts of both.
- You can have a burial plot (with no limit on value).
A burial plot may also include the purchase of a grave site, opening and closing of a
grave site, cremation urn, casket, outer burial container, a headstone or marker, crypt or mausoleum.
Some people have life insurance policies
which they intend to use for their funeral and burial expenses. However, unless the
face value of the policy is less than $1,500, the cash value of the policy may count as an
asset for Medicaid purposes. The asset limit for Medicaid is $1,600 for an
individual.
Similar rules apply for the State Supplement
program.
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Why should I buy an irrevocable
funeral contract?
As explained, an irrevocable funeral contract up to
$5400 is not "counted" for Medicaid purposes. If you want to set aside
funds for your funeral, this is the way to do it. If you make your funeral
arrangements in advance, this may be a relief to your family. Also, if you are
indigent upon death, it will mean that you will not be buried in a "pauper's
grave." The most that the state will spend on the burial of an indigent person
without a funeral contract is $1,800. This may not be enough to ensure burial in
one's location of choice. Cremation may be cheaper, but if religious beliefs or
personal preferences rule out cremation, it may be a hardship to family to provide for a
loved-one's burial.
Why shouldn't I buy an
irrevocable funeral contract?
If you don't want a very expensive burial
arrangement, or want the cheapest cremation available, the purchase of a pre-paid
funeral contract may be a waste of money. Even if you are expecting to apply for
Medicaid (Title 19), there are other ways you may be able to spend down your funds
other than on a funeral contract.
How can I find out the least
expensive form of funeral?
Check the web site of the Funeral Consumer Alliance of
Connecticut, or call them at 1-800-607-2801. The Alliance surveys all funeral
homes in the state and can let you know how to find the lowest price (or compare the price
to discuss with your funeral home of choice).
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If I decide to purchase a
pre-paid funeral contract, what should I look for?
If you decide to purchase, a pre-paid funeral
contract, you will be making an investment of a substantial amount of money. You
will want to make sure that the funeral home you go to is reputable, financially sound,
and provides you with the information you need to make informed decisions. Ask your
family and friends in the community for recommendations. Interview a few different
funeral homes for sake of comparison and to make sure you feel comfortable with the
personnel.
What happens to my money if I
purchase an irrevocable funeral contract? How do I know the place won't go out of business
and leave me with nothing?
The money you give the funeral home must be placed in
an escrow account and invested for your benefit by a state-authorized escrow agent.
The law requires the funeral home to inform you who the escrow agent is and provide you
with an annual statement of the amount of money credited to your account. If you are
not satisfied with the funeral home, you may transfer your contract to a different funeral
home.
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Are these contracts all the
same? How do I know I'm getting a fair contract?
Funeral contracts are not all the same. It is
important that you have an understanding about what goods and services are available and
whether you really need all the services that are being offered or included in your
funeral home contract. For example, embalming is sometimes included in the contract
when it is not needed. To learn more about the goods and services offered by the
funeral home industry, it is recommended that you read the report issued by the Attorney
General and the Connecticut Public Interest Research Group (ConnPIRG) on their
investigation of the funeral home industry in Connecticut. To obtain a copy of this
report call the Funeral Consumer
Alliance of Connecticut at 1 (800) 607-2801.
When you visit the funeral home to discuss a
contract, it may be helpful to take along the Consumer's Funeral
Contract Checklist published by the Attorney General's office and ConnPIRG. If
possible, take a supportive friend or relative who can assist you as you go through the
checklist
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What should I do with the funeral
contract?
If you decide to buy a funeral contract, give a copy
to a trusted relative or friend. Keep your funeral contract with your will in a
place where others can easily find it after your death. If you go to a hospital or
nursing home, tell them the name of your funeral home and the location of your funeral
contract.
What if my family doesn't agree
with my decisions about a funeral, or about my burial?
Under Connecticut law, an unmarried person may
designate a person to be the "custodian" of his or her remains at death.
That person has the right to decide on the burial, funeral, or other options. If you
are not married, and are concerned that your family may not share your wishes for the
disposition of your remains, you may execute a document designating someone who shares
your views and whom you can trust to carry them out. You may also wish to do this if
you expect disputes among your family members. Click here for a copy of the Checklist.
What if I want to leave my body
to science?
For more information about anatomical gifts, take a
look at our page on Living Wills and Other Advanced Directives.
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Should I buy a pre-paid burial
plot? What is the difference between a burial plot and a funeral contract?
The costs of a funeral do not include the costs of a
burial plot. The cheapest plot is likely to be $500, but if you have no assets, your
family may have to pick up the cost if you do not want to be buried in the state cemetery
for "paupers." A burial plot includes the purchase of a grave site,
opening and closing of a grave site, cremation urn, casket, outer burial container and a
headstone or marker.
A burial plot is also not "counted" as an
asset when determining Medicaid eligibility. If you are in a nursing home or on the
Connecticut Home Care Program for Elders (Medicaid Waiver category), the burial plots
of your spouse and immediate family are also excluded as an asset for Medicaid
eligibility purposes. "Immediate family" includes the following family
members and their spouses:
a natural, adopted or step-child of the Medicaid
recipient, regardless of age; and
a natural or adoptive parent of the Medicaid
recipient; and
a sibling of the assistance unit.
Unlike a funeral contract, however, a pre-paid burial
plot is not transferable. You can't get a rebate and invest in a different cemetery.
What do I do if I think I have
been scammed by a funeral home?
If you believe you may have been scammed, contact the
Office of the Attorney General at (860) 566-5374.
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