If, after meeting with a funeral director and Pre-planning a funeral, you think it is a prudent decision to prefund, then there are several considerations to be weighed before proceeding. 

Burial Accounts, Revocable or Irrevocable?

There are two basic types of burial accounts in New York State...Revocable and Irrevocable. Both accounts fit their particular niche very well, and though much the same in many respects, also have some important differences.  The conditions in which an Irrevocable burial account may be established primarily rest on the beneficiary's Medicaid status.  If a person is receiving, or applying for Medicaid, and is opening a burial account, it would have to be Irrevocable. 

In Revocable burial accounts, deposited monies are placed into a trust account in the beneficiary's name, in trust for the funeral home.  Upon death, the funeral director has to present a death certificate to the trust company in order to liquidate the account to pay for the funeral.  If there is money left over after paying the funeral bill, the excess would be returned to the family.  A Revocable burial account is completely transportable from one funeral home to another, and it is able to be closed by the beneficiary prior to death with the full principle and interest refunded.

In an Irrevocable burial account scenario, deposited monies are also placed in a trust account in the beneficiary's name, in trust for the funeral home.  At the time of death, the funeral director will also have to present a death certificate to the trust company in order to liquidate the account to pay for the funeral.  That is where the similarities with the Revocable burial account end.  If there is any money left over in the account after the funeral bill has been settled, the county from which the beneficiary was receiving Medicaid will lay claim to the excess, or overage.  An Irrevocable burial account is transportable from one funeral home to another, at no cost, but is not able to be liquidated for any reason other than the death of the beneficiary.

Where is my money kept?

We use PrePlan® for our funeral trust pre-funding program, backed by the New York State Funeral Directors Assosciation, Inc. that is the nationally-recognized leader in managing prepaid funeral and burial accounts. PrePlan®  invests in FDIC insured CD's, therefore satisfying New York State Law, and providing safety in investment.