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.

With consequences so devastating, why does anyone still drink and drive? And what will it take to drive home the point that drunk driving is deadly? A website that offers funeral planning and other funeral-related services may be on to something. In mid-May, Funeralwise.com launched a PR campaign to remind people not to drink and drive over the Memorial Day weekend.

Sure, it’s been done before, but this public awareness campaign offered a unique incentive that was innovative, stark and to the point: free funeral planning services for people who plan to drink and drive. Those who don’t drink and drive were also invited to take advantage of the site’s free funeral planning services, and Funeralwise.com pledged to donate $10 to MADD for the first 10,000 people who responded to the offer.

As of this writing, there’s no word on how many people participated in the free funeral-planning offer, and national statistics on traffic deaths over the Memorial Day holiday weekend have not yet been released. (Results from individual states was mixed, with some reporting record increases and others showing dramatic decreases in traffic deaths over the holiday weekend.) We’ll probably never know if any lives were saved by this pointed reminder of the deadly effects of drinking and driving, and only time will tell if this type of campaign can help to reduce the rate of alcohol-related traffic deaths.

For now, keep in mind that the upcoming July 4th weekend is the second deadliest holiday traffic period (Memorial Day is third). Let’s make it safe this year.