In recent years, pre-need contracts have been touted by some in the funeral industry as a way for consumers to control costs. Customers who sign pre-need contracts pay their funeral costs in advance in order to lock in current prices for funeral goods and services that are likely to escalate in the coming years.

Problems with pre-need contracts
While the terms of pre-need contracts can vary from one funeral home to another, the basics are the same: a person chooses a casket or cremation urn and any services he or she wants and then pays for the package either in a lump sum or in monthly installments. If the pre-need contract is paid in full at the time of death, the family won’t have to concern themselves with making funeral arrangements or scrambling to find a way to pay for them.

In some states, funeral homes or third-party sellers of pre-need contracts are allowed to take a percentage of the money up front for commissions and expenses, as well as the interest that accrues on the money paid by the consumer.

Unfortunately, there have been reports of problems with pre-need contracts from many states, from cheap, imported caskets that fail to meet the quality the consumer paid for, to a disturbing rise in funeral home fraud and mismanagement complaints. Some consumers have been unable to recover the money they prepaid after they cancel a pre-need contract, and some families have been forced to pay thousands of dollars more for funerals than the contract stipulated. In the most blatant cases of fraud, some funeral directors have essentially stolen the money from prepaid contracts and used it for their own purposes.

Another problem with pre-need funeral contracts is the fact that they’re not portable, but rather require the consumer to use the services of the funeral home that issued the contract – a significant downside in today’s mobile society.

Pre-planning makes sense
Pre-planning is another matter, however. The major difference between pre-planning and pre-need contracts is that pre-planning doesn’t require any money to change hands. For individuals who want to make sure their desires are carried out when they die and don’t wish to burden their families with worries about funeral services, caskets, burial or cremation and the like at a time when family members are likely to be overcome by grief, pre-planning may be the way to go.

Another reason we think that pre-planning makes more sense than a pre-need contract is the fact that people change their minds. If you sign a contract designating a certain type of casket and a cemetery where you wish to be buried, for example, and then later decide you’d prefer to be cremated and have some of your ashes scattered and the rest retained in a cremation urn, it’s much easier to change your plan than to amend your contract or get a refund. The same is true if you wish to add new services not considered in your contract, such as a green funeral or the use of technology to webcast your funeral.

Bottom line
Pre-planning your funeral can mean peace of mind for yourself and your family, but when it comes to paying for the arrangements, we recommend using the proceeds from life insurance or setting up a special account to save for your final expenses.

Like trimming the grocery budget or turning off extra lights in the house, consumers may look for ways to lower funeral costs, but the fact is, we all die eventually, and someone has to deal with the remains. Some funeral industry professionals are responding to the economic downturn by offering a wider range of goods and services to help people arrange their final exit in the style of their choosing.

One Funeral Director’s Response
Peter Moloney, whose family owns six funeral homes on Long Island, has made it his mission to help customers arrange unique funerals on behalf of themselves or their loved ones. From a hearse towed by a Harley-Davidson motorcycle to an ice-cream vendor in a Good Humor truck greeting mourners after a funeral, Moloney’s specialized services allow people to be remembered in ways as unique as they are. According to Moloney, 44, a fourth-generation funeral director: “You have to give people something special. If you’re not, someone else will be. That means adjusting to what people want today.”

Even in Recession, Many Opt to Go in Style
As funerals trend more toward cremation and home funerals and away from elaborate caskets with all the trimmings, consumers are driving the recession home to the funeral industry. One of the ways innovative funeral directors like Moloney are responding is by catering to individual wants and needs. For example, services for environmentally and cost-conscious families may include renting coffins and minimizing the use of chemicals, while custom amenities such as 14-karat gold mementos and personalized coffins and cremation urns appeal to people who prefer to go in style.

Growing Market
One thing funeral directors and others in the funeral industry can count on, even in economic hard times, is an endless stream of clients. And while consumer funeral spending may be on the decline, the rising number of deaths each year ensures a certain level of growth in funeral goods and services. (The annual death rate will continue to grow at about 1 percent per year through the early 2020s, corresponding to the aging of the baby boomers.)

In other words, while the recession is forcing funeral industry professionals to reconsider the goods and services they will offer and how they will deliver them, those who are prepared to adapt and evolve will continue to prosper.

And then there’s the downside – Hong Kong is crowded. At roughly 6,700 people per square mile, Hong Kong’s population density ranks third in the world. Hong Kong is so crowded, diners share tables in restaurants. So crowded, pedestrians seem to move in unison, streaming through the city like a giant river. So crowded, even the dead can’t find a place to rest.

Just to clarify, we’re not talking about traditional burials; Hong Kong moved away from in-ground burials long ago (although traditional burial is still an option in some cases – more on that later). No, we’re talking about cremated remains and the fact that Hong Kong is so crowded, securing a resting place for a cremation urn bearing a loved one’s ashes can take years.

Racing to meet demand
The magnitude of the problem was underscored on April 14. That’s the day the Hong Kong government began accepting applications for space in the nine-story Diamond Hill Columbarium, which houses 18,500 new niches. The response? Nearly 1,000 people stood in line outside the columbarium’s office on the first day of sales to submit their applications for the largest release of new niches in nearly a decade.

Trends indicate that the space crunch won’t end any time soon. The city’s annual death rate has doubled since 1970, and the entire funeral industry is scrambling to cope with the demand for services; 9,500 people are currently on the waiting list for a niche. And while the government has announced plans to open 37,000 new niches by 2012, that’s scarcely enough to accommodate the people who die in one year. Officials estimate that by 2016, there will only be niches for half the people who die each year.

A temporary solution to a permanent problem
Oh, and about that burial option we mentioned earlier? Only the wealthy need apply. Demand for burial space, what with the ongoing land shortage and rapidly aging population, has driven the price of a permanent plot to $30,000 or more. Or, a family can rent a temporary plot from the government for around $3,000 for 10 years. When the 10 years are up, the family can renew for 10 more . . . or not. If the family doesn’t renew, the remains will be exhumed and the plot yielded to someone else.

No word on what happens to the exhumed remains.

Cremation Urns Reflect Modern Trends

Modern funeral trends can also be seen in the array of unique cremation urns that are designed to reflect the personalities, lifestyles, hobbies and beliefs of the deceased whose ashes they hold. Although most people still envision a classic Grecian urn on a shelf when they think of cremation urns, choices now include motorcycle urns, religious urns, photo-frame urns, and tiny keepsake urns, to name just a few.

Cremation jewelry is another popular choice, designed to hold a tiny portion of ashes in a pendant that can be worn close to the heart. And some companies, like Memory Glass of Santa Barbara, create memorial jewelry from cremains, while others incorporate thumbprint impressions of the deceased in their creations.

A New Generation of Funeral Directors

Much of the credit for these novel trends in funeral goods and services belongs to a new generation of funeral directors, like Leo Dumont III and Andrew Hall, both of Nashua, New Hampshire. Both men earned degrees in other fields before going to work in their families’ funeral homes, while many other young adults who choose careers in funeral services have no family connection to the funeral industry. What these 20- and 30-somethings have in common are the fresh perspectives they bring to their work – innovative ideas that help to breathe new life into the funeral business.