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Pre-Plan and State-Approved Trust Fund

 

My mother bought a pre-plan from a Florida funeral home, which was bought out by a large corporation. We heard they have taken the funds out of state approved trust fund, do you know if this is true and if so can we get her money back?

The answer to your question is somewhat complicated for several reasons.

1. Florida state laws (like any other state) are very specific as to what can and cannot be done with monies set aside for a trust. When funeral homes are purchased, it is common for new owners to begin to re-distribute pre need funds (as long as it is legal with state laws) so they can institute their own program going forward.

Not being any expert on Florida laws, my best advice is for you to have a meeting with the new owners (regardless of SCI ownership) so you can explore and discuss options.

Generally, funds could be returned (with some financial penalty) to consumers; however, it also is usually dependent upon the type of trust: a revocable trust, which allows some flexibility, is different from an irrevocable trust (which usually ties the funds specifically to a funeral, etc.)

Is it legal? We cannot make that determination.

Finally, as a last resort you can check with the NFDA (www.nfda.org) to find out from them how they can reach their local (Florida) state funeral director association for guidance.

My advice is to be careful, be patient to find out ALL the options, and to have the family not be "talked into" something by any funeral home without knowing all the facts.

The bottom line is that it is still THEIR money—it just depends on how they are able to apply it/or use it within the guidelines of the specific trust and within the state regulations.

Hope this is helpful. --Ed.

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