Virginia Administrative Code › Title 18 - PROFESSIONAL AND OCCUPATIONAL LICENSING › Agency 65 - BOARD OF FUNERAL DIRECTORS AND EMBALMERS › Chapter 30 - REGULATIONS FOR PRENEED FUNERAL PLANNING › Part VIII - Required Content of Contracts and Disclosures › Section 18VAC65-30-230 - Content of disclosure statements

Current through Register Vol. 40, No. 24, July 15, 2024
The following disclosure statements shall be provided as a
					 part of any contract used for preneed funeral planning:
We are required by law and/or the Virginia Board of Funeral
					 Directors and Embalmers to provide access to and the opportunity for you to
					 read the following information to assist you in preplanning. A question and
					 answer format is used for clarity and includes the most commonly asked
					 questions.
PRENEED CONTRACTS
-- Is there more than one type of preneed agreement
Yes. Guaranteed contracts mean that the costs of certain
					 individual items or the cost of the total package will never be more to your
					 family or estate. Nonguaranteed means just the opposite. (See the section
					 entitled "General Funding Information" for more information on guaranteed and
					 nonguaranteed costs.)
Contracts may be funded by insurance/annuity policies,
					 trusts, or transfer of real estate/personal property.
-- What are my protections
You should take your completed preneed contract home before
					 you sign it and review it with your family or your legal advisor. You have a
					 right to this review before you sign the contract or pay any money.
You should also read carefully the information in this
					 disclosure statement. If you have any questions, contact the seller for more
					 information or contact your legal advisor.
CANCELLATION
-- Can I cancel my preneed agreement if I change my mind
					 Will I get my money back
You may cancel payment for supplies or services within 30
					 days after signing the agreement. If you funded your preneed arrangement
					 through a trust, the contract seller will refund all the money you have paid
					 plus any interest or income you have earned.
If you funded your preneed arrangement through a revocable
					 trust and you cancel the preneed contract AFTER the 30-day deadline, you will
					 be refunded all of your money on the items that are not guaranteed and 90% of
					 all your money on the items that are guaranteed. You will also receive any
					 interest or income on that amount. A revocable trust is a trust that you can
					 cancel.
There may be a penalty to withdraw money from a revocable
					 trust account which has already been established in your name. If there is,
					 your contract will give you this information. (See the first question under the
					 section entitled "Payment" below.)
If you have funded your preneed arrangement through an
					 irrevocable trust you will not be able to cancel the trustagreement after 30
					 days following its execution except in accordance with § 64.2-729 of the
					 Code of Virginia.
If you funded your preneed arrangement through an insurance
					 policy/annuity contract which will be used at the time of your death to
					 purchase the supplies and services you have selected, you will need to pay
					 careful attention to the cancellation terms and conditions of the policy. You
					 may not be eligible for a refund.
PAYMENT
-- What happens to my money after the contract is
					 signed
Your money will be handled in one of several ways. It may
					 be deposited in a separate trust account in your name. The trust account will
					 list a trustee who will be responsible for handling your account. The funeral
					 home you have selected as your beneficiary will also be listed. You have the
					 right to change the funeral home and the trustee of your account prior to
					 receiving the supplies and services under the preneed contract.
Your money may be used to purchase a preneed life insurance
					 policy which may be used to pay for your arrangements upon your death. The
					 proceeds of the policy will be assigned to the funeral home of your choice. You
					 may change the funeral home assignment at any time prior to receiving the
					 supplies and services under the preneed contract.
You may decide to choose a life insurance policy or a trust
					 account that requires regular premium payments and not have to make an
					 up-front, lump sum payment.
-- May I pay for goods and services with real estate or
					 personal property
Yes. When you pay for these supplies and services in whole
					 or in part with any real estate you may own, the preneed contract that you sign
					 will be attached to the deed on the real estate and the deed will be recorded
					 in the clerk's office of the circuit court in the city or county where the real
					 estate is located.
If you pay for goods and services with personal property
					 other than cash or real estate, the contract seller, will declare in writing
					 that the property will be placed in a trust until the time of your death and
					 will give you written information on all the terms, conditions, and
					 considerations surrounding the trust. The contract seller will confirm in
					 writing that he has received property.
You may decide not to transfer the title of the personal
					 property to the contract seller of your preneed contract. In this situation,
					 you will have to submit information to the contract seller in writing that you
					 are giving him the property without a title, and describe the property and
					 where it will be kept until the time of your death.
In either case, the written statements will be recorded in
					 the clerk's office of the circuit court of the city or county in which you
					 live. The written statement does not have to be a separate document.
GENERAL FUNDING INFORMATION
-- If the prices of the goods and services are affected by
					 inflation between now and my death, will the funding I choose be adjusted
					 accordingly
There is a possibility that the funding may fail to keep up
					 with inflation. This could mean that the funding you choose could have
					 insufficient value to cover all expenses.
-- What happens if my funding is not enough to cover the
					 full cost of these arrangements
If the entire funeral or specific items in the agreement
					 are guaranteed by the contract seller, your family or estate will not have to
					 pay any more for those items provided that you have paid the grand total in
					 full and all interest earned is allowed to accumulate in your account. However,
					 if you have not paid the account in full and have not allowed the interest to
					 accumulate in the account and any items increase in price, your family or
					 estate would be responsible for the extra amount if the funds are not
					 sufficient. In some situations where you pay toward your funding with regular
					 premiums rather than in one lump sum, your account may not be enough at the
					 time of your death to cover everything.
-- What happens to the extra money if my funding is more
					 than what is needed to pay for these arrangements
Sometimes, as explained in the answer above, your funding
					 account may not have had the time to grow sufficiently before your death to
					 cover items which are guaranteed in price to you, yet have increased in price
					 for the funeral home.
After funeral expenses are paid, there may be money left
					 over. Because of the ongoing risk that a funeral home takes in guaranteeing
					 prices for you, the funeral home may not be required to return this excess
					 money.
Some funding agreements and funeral homes, however, require
					 that extra money be returned to the estate or family. Others do not. You should
					 obtain information concerning this in writing before signing the preneed
					 contract.
The answers to the following questions will depend upon the
					 terms and conditions of the individual's funding and preneed agreements.
Please review your preneed contract and/or funding
					 agreement for answers to these questions.
-- What happens to my preneed contract if I change my
					 assignment from one funeral home to another
(Funeral home shall place answer here)
-- What happens to my preneed contract if I change the
					 beneficiary of my funding or the use of my proceeds from the funding.
If you make such changes, it could void your contract. You
					 should request specific information from the contract seller and the funding
					 arrangement.
-- What will happen to my preneed contract if I fail to
					 make agreed to premium payments to my funding source
(Funeral home shall place answer here)
-- Do I get any money back if I surrender or cancel my
					 funding arrangements
(Funeral home shall place answer here)
TRUST ACCOUNT
-- If my money goes into a trust account, what information
					 will I receive about that account
If you want your money to go into a trust fund, the trust
					 agreement must furnish you with information about the amount to be deposited
					 into the account, the name of the trustee, information about what happens to
					 the interest your trust account will earn, and information about your
					 responsibility to file and pay taxes on that interest.
If there are filing expenses connected with your trust
					 account, you will be notified what the expenses are and whether you or the
					 contract seller is the responsible party for paying those.
-- What happens to the interest earned by the trust
The interest earned by the trust may be handled in
					 different ways by different trust arrangements. The interest may have to go
					 back into your account if items on your contract are guaranteed. You may be
					 responsible for reporting that interest to the Internal Revenue Service and
					 paying taxes on it. You will be responsible to pay any taxes on the interest
					 earned even if you cancel your trust account.
Some trust accounts cannot be cancelled.
There may be special fees deducted from your interest.
					 However, you may still be responsible for paying taxes on the entire amount of
					 interest earned before the fees were deducted. Please ask your contract seller
					 for a written list of any fees so you will have a clear understanding about
					 them before you sign the contract.
-- If I pay my trust in premium payments, what happens if I
					 die before the grand total of the funeral has been placed in trust
(Funeral home shall place answer here)
CLAIMS AGAINST THIS CONTRACT
-- Can someone to whom I owe money make a claim against the
					 money, personal property, or real estate that I have used to pay for this
					 contract
No. This money or property cannot be used to settle a debt,
					 a bankruptcy, or resolve a claim. These funds cannot be garnished.
-- Can the money or property be taxed
No. Currently, interest earned on the money you deposit in
					 a trust, savings account, or the value of the property you used for payment can
					 be taxed but not the original amount which you invested. Interest earned on
					 annuities is generally deferred until withdrawal.
GENERAL GOODS AND SERVICES
-- If I choose goods and services that might not be
					 available at the time of my death, what is the provider required to do
The funeral home which you select is required to furnish
					 supplies and services that are similar in style and equal in value and quality
					 if what you choose is no longer made or is not available at the time of your
					 death.
Your representative or next-of-kin will have the right to
					 choose the supplies or services to be substituted. However, if the substitute
					 is more expensive than the item originally selected by you, your designee or
					 next-of-kin would be responsible for paying the difference. Under no
					 circumstances will the funeral establishment be allowed to substitute lesser
					 goods and services than the ones you chose.
If, before your death, the funeral home goes out of
					 business or is otherwise unable to fulfill its obligation to you under the
					 preneed contract, you have the right to use the proceeds at the funeral home of
					 your choice.
If the inability to provide services does not become
					 apparent until the time of your death, the individual that you named as your
					 designee could use the funds for services at another funeral home.
-- May I choose the exact item I want now and have the
					 funeral home store it until my death
If the funeral home or supplier has a storage policy you
					 may ask for this service. If the funeral home or contract seller agrees to
					 store these items, the risk of loss or damage shall be upon the funeral home
					 during the storage period.
For example, what would happen if you select a casket which
					 is in-stock at the time you make these arrangements and the funeral home or
					 supplier agrees to store it for you in their warehouse and:
(i) damage occurs, (ii) the funeral home or
				  supplier goes out of business, (iii) the funeral home or supplier is sold, etc.
				  You need to be assured in writing of protection in these types of situations.
-- What happens if I choose to have a unique service that
					 is not customary or routine in my community Must the funeral home comply with
					 my wishes
The funeral home which you have chosen to conduct your
					 service may be able to only provide certain types of services. They may not be
					 able to fulfill your request. If there is a restriction on what they can
					 provide, you will be notified in writing before you sign the preneed
					 contract.
If the funeral home agrees in writing before you sign the
					 contract to perform such services, the funeral home shall provide you a
					 written, itemized statement of fees which you will be charged.
-- Will the funeral home agree to transport my body to
					 another area for burial
Again, the funeral home may have restrictions on the
					 distance they are willing to travel to conduct a burial. If restrictions apply,
					 you will be notified in writing.
If the funeral home agrees in writing before you sign the
					 contract to honor your wishes, the funeral home shall provide you a written,
					 itemized statement of any penalties (fees) which you will be charged.
-- I may die and be buried in a city other than one where
					 the funeral home that I select for my goods and services is located. Will the
					 funeral home that I select under this contract deliver my merchandise to the
					 city where I die and am to be buried
This is entirely up to the funeral home to decide. If the
					 funeral home has restrictions on this, they will notify you in writing. If they
					 agree to ship merchandise to another area for your funeral, you will be
					 notified before signing this contract of the fees involved if they can be
					 determined and guaranteed at this time.
However, the preneed contract arrangements and funding is
					 considered portable. This means that they are available for transfer from one
					 locality to another. It is unusual for actual goods and merchandise to be
					 transferred.
PRICING
-- How will I know that the prices of items which I select
					 are the same for everyone
The funeral home maintains a general price list and a
					 casket and outer burial container price list. Your contract seller will give
					 this to you before you begin talking about arrangements. After your discussion
					 is finished, you will be given a copy of your preneed contract on which charges
					 will be listed. Charges will only be made for the items you select. If there
					 are any legal or other requirements that mandate that you must buy any items
					 you did not specifically ask for, the contract seller will explain the reason
					 for the charges to you in writing.
You may ask a funeral home to purchase certain items or
					 make special arrangements for you. If the funeral home charges you for these
					 services, you will receive an explanation in writing. The charges to you for
					 these services may be higher than if you or your family purchased them
					 directly.
At the time of your death, your family or estate will be
					 given an itemized statement which will list all of the specific charges.
-- What is meant by guaranteed and nonguaranteed
					 prices
Some contract sellers may agree that certain prices are
					 guaranteed. Some may guarantee the price of the total package. Other funeral
					 homes may not guarantee any prices.
Guaranteed prices are those that will not increase for your
					 family or estate at the time of your death. Basically, this means that your
					 funeral arrangement for those items will be covered by and will not exceed your
					 funding and the interest it earns. Nonguaranteed prices are those which might
					 increase or decrease. The nonguaranteed prices may be written in at the time of
					 this contract with you understanding that the price is an estimate only and may
					 increase or decrease. A settlement to that effect may have to be made with your
					 family or representative after your death.
-- Can the contract seller and I negotiate a projected
					 charge for the nonguaranteed items based on the rate of inflation
It is entirely up to the contract seller to inform you of
					 the funeral home policy in that regard.
CASKETS AND CONTAINERS
-- Do I have to buy a vault or a container to surround the
					 casket in the grave
In most areas of the country, state and local laws do not
					 require that you buy a container to surround the casket in the grave. However,
					 many cemeteries ask that you have such a container to support the earth above
					 the grave. Either a burial vault or a grave liner will satisfy if such
					 requirements exist.
-- Is a casket required
A casket is not required for direct cremation. If you want
					 to arrange a direct cremation, you may use an unfinished wood box or an
					 alternative container made of heavy cardboard or composition materials. You may
					 choose a canvas pouch.
-- Do certain cemeteries and crematoriums have special
					 requirements
Particular cemeteries and crematoriums may have policies
					 requiring that certain goods and services be purchased. If you decide not to
					 purchase goods and services required by a particular cemetery or crematorium,
					 you have the right to select another location that has no such policy.
EMBALMING
-- Is embalming always required
Except in certain special cases, embalming is not required
					 by law. Embalming may be necessary, however, if you select certain funeral
					 arrangements such as viewing or visitation with an open casket. You do not have
					 to pay for embalming you did not approve if you select arrangements such as a
					 direct cremation or immediate burial. If the funeral home must charge to
					 conduct an embalming, your designee will be notified of the reasons in
					 writing.
ASSISTANCE
-- This is all very confusing to me. May I pick someone
					 close to me to help with all of this May this person also work with the funeral
					 home to ensure that my wishes as written in the preneed contract are carried
					 out
You may designate in writing a person of your choice to
					 work with the funeral home and contract seller either before or after your
					 death to ensure that your wishes are fulfilled. You must sign the statement and
					 have it notarized. The person that you designate must agree to this in writing.
					 Under the laws governing preneed contracts, the individual whom you designate
					 has final authority at the time of your death.
-- Where can I complain if I have a problem concerning my
					 preneed contract, the contract seller, or the funeral home
You may direct your complaints or concerns to:
The Board of Funeral Directors and Embalmers
9960 Mayland Drive, Suite 300
Richmond, Virginia 23233
Telephone Number (804) 367-4479
Toll Free Number 1-800-533-1560
Fax: (804) 527-4413
Statutory Authority
§§ 54.1-2400 and 54.1-2803 of the Code of
						Virginia.