New York Estate Planning & Elder Law Blog
NEW YORK PROTECTIONS
Many people are leary about purchasing a pre-paid funeral. This blog discussed some of the issues common to prepaid funerals. In 2002, the American Association of Retired People (AARP) issued a consumer “scam alert” warning people to preplan but not prepay for their funerals. Indeed, often this is good advice. What really should be discussed and should be planned for and paid for is an irrevocable prepaid funeral fund.
It will not render a person ineligible for Medicaid, as Medicaid treats irrevocable trusts as an exempt asset. Some prepaid funeral plans incur account maintenance fees or various other unforeseen problems could result from prepaying for a funeral. It is important to note, however, that New York has some of the strongest consumer protection laws in place for prepaid funerals. Most specifically, the law requires that the money be put into an individual account – as opposed to an account for all of the individuals who prepay for their funeral through a particular funeral director or funeral home – that is both interest bearing and insured, which remains the property of the consumer. If the funds are in a revocable account, the consumer may request a full refund at any time. The funeral home or funeral director also ensures that the consumer receives a notice of what bank the funds are held in and as well as a statement of any interested earned.