Can You Transfer a Prepaid Funeral Plan?

The money moves; the price may not

A prepaid plan is two things at once. One is money: a trust account at a Utah bank or trust company, or an insurance policy. The other is a contract with one funeral home that says what it will provide and, often, that it will provide those items at today’s prices.

The money can usually be redirected to another funeral home. The contract itself doesn’t pass to another funeral home. A new funeral home prices the same services from its own price list, and we found nothing in Utah law that requires it to match what the first funeral home promised. Whatever the plan holds is applied to the new bill.

Here is what that looks like. Say someone prepaid a $1,000 direct cremation with a low-cost cremation provider, and the family later wants a funeral home whose cremation costs $3,000. The funeral home can take the plan, but what moves is the $1,000, not the $1,000 price. The family pays the other $2,000.

If a death happens far from home

This is the situation Utah’s model contracts plan for. If a death happens outside the area the first funeral home can reasonably serve, the first funeral home either arranges services with a funeral home where the death happened, or hands over the plan’s money to that funeral home: the trust money in a trust-funded plan, or its rights under the policy in an insurance-funded plan. Charges from the other funeral home above what the plan holds are the family’s to pay.

Bringing someone home adds a second set of charges, one from the funeral home where the death happened and one from the funeral home that receives the body here. See if a death happens away from home for what that costs.

If you want to use a different funeral home

Families switch for ordinary reasons: a move across the valley, a funeral home that changed owners, or a family that would rather use the funeral home their parents used. How it works depends on how the plan is paid for.

Call the new funeral home before you change anything. Ask whether it accepts transferred plans, and ask for its price for the same items in writing, so you know the difference before the money moves.

If you move out of Utah

Utah’s model contracts don’t include a section on moving. Funeral homes in another state usually don’t honor a Utah funeral home’s price guarantee, so plan on the new funeral home’s prices. Ask the insurance company whether the policy can be assigned to a funeral home in your new state. For a trust-funded plan, ask the Utah funeral home how it would release the money, and whether any fee applies.

Irrevocable plans and Medicaid

Many people set up an irrevocable plan when they apply for Medicaid. Changing it needs more care. Utah requires preneed contracts to warn that a Medicaid recipient whose contract is cancelled may lose Medicaid eligibility. If the plan is irrevocable, ask for a transfer to another funeral home, not a cancellation and refund, and talk to a Medicaid eligibility worker or an elder law attorney before you sign anything. More on this in how prepaid funeral plans work in Utah.

How to transfer a prepaid funeral plan

1. Find the contract and the funding papers. The itemized contract, plus the trust statement or the insurance policy.
2. Call the new funeral home first. Ask whether it accepts transferred plans, and get its price for the same items in writing.
3. Compare the two. Line up the plan’s current value against the new funeral home’s price. The gap is what your family would pay.
4. Ask the first funeral home how it releases the plan. Get any fee, and the amount that will move, in writing.
5. Sign the assignment or transfer papers. For insurance, that is usually the insurer’s form. For a trust, it’s the funeral home’s release.
6. Get the new contract in writing, with what is guaranteed and what is an estimate. See what is not included in a prepaid funeral plan.
7. Tell your family which funeral home now holds the plan, and replace the old copy in your papers.

Common questions