WHAT IS A PREPAID FUNERAL?
The pre-paid funeral is an arrangement that allows an individual to pre-select his or her funeral plans (i.e. wake or viewing service, casket, flowers, cards, etc.). This arrangement can be made by the specific individual or on behalf of an individual by family members.
Pre-paid funerals are generally paid by the use of cash or an existing life insurance policy. Most funeral homes will accept an assignment of an existing life insurance policy provided that the owner of the policy irrevocably names the state of New Jersey as the beneficiary if the person has been qualified for Medicaid and anything beyond the cost of the funeral, the balance can be left to a family member.
WHAT ARE THE BENEFITS OF A PRE-PAID FUNERAL?
The benefits of a prepaid funeral are:
- Your pre-paid funeral trust fund is 100 percent refundable upon demand with interest and without any penalty.
- It is transferable to another participating funeral home.
- The pre-paid funeral accounts are excluded as a resource for SSI/Medicaid general assistant purposes for qualified beneficiaries
- The pre-paid funeral trust fund provides annual tax statements and a summary of your account with interest earned.
- You are required to report the income if you file income tax returns.
- You can view your account balance on line at any time at www.njsfda.org.
- There are no health or age limits questions because it is not an insurance policy.
If you are interested in any additional information regarding the New Jersey Pre-Paid Funeral Trust Fund you can look at the following source: www.njsfda.org.
The information presented in this article is not legal advice and does not create an attorney-client relationship with Bourne, Noll & Kenyon.