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Purchasing a Pre-Paid Funeral Plan is An Important Part of a Well-Rounded Estate Plan

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By Emily Martin, Esq.

As you approach retirement, it is always a good idea to plan for your future, including developing a plan for what will happen when you pass away. One way to make things easier for your children and loved ones after you’re gone is to purchase a pre-paid funeral plan. This can include buying your grave plot (including closing and opening of the grave, gravestone, and any engravings that you may want), purchasing your coffin, paying for funeral home expenses, or pre-paying for cremation. Because the cost of purchasing a pre-paid funeral plan doubles every five to ten years, it is always a good idea to purchase a plan sooner rather than later. While taking care of all of this before you pass away can be a great way to take some of the burden off of your loved ones, you need to make sure that you purchase a plan that will endure beyond your lifetime, so that it will still be available after you pass away. Below are a few tips that will help steer you in the right direction:

Compare plans before you decide. According to the National Funeral Directors Association, the average cost of a funeral is $6,500 – not including extra expenses such as flowers, obituaries, and cemetery costs. What most people don’t realize is that they are not required to buy the first package the funeral director quotes them. In fact, the Federal Trade Commission requires funeral directors to provide itemized prices for goods and services. This allows you to choose what you need the most. Another good tip – you don’t have to buy every service from one funeral home. Funeral providers are not legally permitted to refuse to handle a coffin you bought elsewhere, nor can they charge an extra fee for handling a coffin they did not sell you.

Understand how your funeral plan affects your eligibility for public benefits. In Virginia, prepaid burial contracts are not considered a countable asset for Medicaid eligibility purposes as long as the burial contract is irrevocable. Purchasing a prepaid burial contract is often an important strategy to implement when planning to protect assets when you or a loved one is preparing to enter a nursing home or needs in-home care and may need to apply for Medicaid. When purchasing this type of prepaid funeral plan, it is important to notify the funeral home that you intend to purchase a Medicaid-compliant plan. It is also vital that you seek the advice of an experienced elder law attorney who will be able to explain how this type of plan works with your overall strategy to protect your assets from being exhausted in the event that you need to apply for Medicaid.

Know what will happen to your money. If you decide to pay the entire cost of your funeral plan up front rather than in installments, make sure you find out where your funds are placed and whether the funeral home will place your funds in a trust account, where it can be kept until it is needed. While the funeral home is required to disclose this information, many people fail to ask where their money is kept.

Ask about refunds and cancellations. One thing many people don’t realize is that funeral homes are not always required to give you a full refund if you cancel your plan. Read your contract carefully to learn what circumstances allow you to cancel the contract and how much money you’ll be able to recoup if you do cancel. Another good question to ask is whether the plan is transferable to a different funeral home in the event that you relocate to a different area. Finally, make sure your contract spells out what will happen if the funeral home goes out of business or comes under new ownership.

Make sure your wishes are clear to your family and loved ones. While thinking about and making plans for your death is not pleasant, it is an important step to take in order to make sure a plan is in place for when you pass away. Many people have specific wishes with regard to their funeral and death, including whether they would like to be an organ donor or whether they prefer to be buried or cremated. It is important to document these wishes, so that your loved ones are able to be sure they are doing what you would have wanted them to do. Making sure that you have an advance medical directive, in which you document your wishes for end-of-life care among other wishes, is an important part of this process. When drafting this document, which is an essential part of a well-rounded estate plan, it is important to seek the advice of an experienced estate planning attorney such as the attorneys at Hook Law Center.

Kit KatAsk Kit Kat – Animals and Workers’ Compensation

Hook Law Center: Kit Kat, what can you tell us about people who get bitten or injured through contact with an animal, and how they may or may not qualify for workers’ compensation.

Kit Kat: Well, this is a complicated issue, but I will attempt to shed some light on some of the factors which affect eligibility for workers’ compensation. Of course, this is coming from a non-lawyer, so I want to make that clear from the start. However, from my reading, this is what I have learned. In Virginia, the decision for eligibility seems to be rather narrow. The risk of a detrimental encounter with an animal must be above the general risk to the public. So, perhaps these two examples will clarify the critical issue. In the case of a carpet installer who was bitten by a snake while on the driveway of a property which had several wood piles along the sides of the driveway, workers’ compensation damages were not awarded to the carpet installer. The judge did not feel the particular house in question had an increased risk of exposure to snakes, nor did he feel that it was common knowledge that snakes inhabit wood piles. In the case of a pet store employee who was bitten by a spider, the opposite occurred. The judge, in that case, ruled in favor of the employee, because the judge ruled that the employee’s work exposed him to an unusual risk.

So you can see that each fact situation is extremely important. The field is an extremely interesting one with many, almost humorous (to the outside observer) situations. One more story to pique your interest. This is called “The Cat on Pizza Box.” In this case, a warehouse employee was bitten by a cat who was sitting on top of a pizza box. The employee went to get a piece of pizza from the box, and when he approached, the cat bit him. The warehouse was not well sealed, and there were many openings for animals like cats, snakes, birds, and even a possum had entered in the past. Because of the unusual situation where the warehouse was not well maintained which created an unsafe work setting, the employee prevailed, and he was awarded workmen’s compensation.

To read more about this fascinating subject, go to Commissioner Wesley G. Marshall’s article entitled “Bites, Nips, and Stings, Animal Encounters, “Arising Out of,” and Workers’ Compensation,” The Virginia Lawyer, October 2018, p.34-37.

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

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Posted on Monday, November 5th, 2018. Filed under Senior Law News.
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