www.OGMHognj.com
PreArrangement - Prepayment

Ocean Grove Memorial Home
118 Main Avenue, Ocean Grove, New Jersey 07756

Thomas J. Saragusa, Manager
N. J. License No. 4036

VOICE 732-775-0434 - - OGMHognj@aol.com


PREPAYMENT - PRE-DEATH FUNDING

As modes of prepayment, the Ocean Grove Memorial Home uses (exclusively) the funding programs of the New Jersey State Funeral Directors' Association...Funeral Planning CHOICES™, the New Jersey Prepaid Funeral Trust Fund™ and Sure Trust™ (a funeral insurance administration trust) all of which meet federal and state consumer protection preneed laws. Since 1981, Funeral Planning CHOICES™ has been helping the Ocean Grove Memorial Home provide the best prefunding programs available.

Consumer protection laws regarding prefunding a funeral vary from state to state. In New Jersey, prepaid funerals can be prefunded in only three ways:

  • through a qualified trust fund

  • by the assignment of existing life insurance policies

    or

  • with a newly issued funeral insurance policy (or annuity) issued on the life of the intended funeral recipient, and specifically intended for funeral purposes.

Cash Deposits to a Trust Fund

One method of prefunding a prearrangement plan is through the use of a trust fund. If a trust fund is used, 100% of the principal paid in and all the accrued interest must inure to the benefit of the trustor (less an annual trustee’s fee of a maximum of 1% of the corpus of the trusted funds).

The trusted funds are deposited in a Federal Deposit Insurance Corporation (FDIC) insured bank account.

The Ocean Grove Memorial Home recommends this mode of funding preneed funeral arrangements, i.e., the use of a trust fund.

In New Jersey, the trusting of funeral funds is (generally) revocable, i.e., 100% refundable to the depositor on demand (including any accrued interest). In addition to being able to completely revoke the trust, the depositor may change the selected funeral services or merchandise at any time without penalty.

Irrevocable trust accounts are limited to prefunded funeral arrangements for SSI/Medicaid recipients and are not refundable in cash although the details of the arrangements may be changed at any time.

In New Jersey, all prepaid accounts specifically for the purpose of funding a funeral for a recipient of SSI/Medicaid must be irrevocably trusted, i.e., they are NOT REFUNDABLE IN CASH...the details of the arrangement may be changed at any time but "prepaid funds held in an irrevocable trust are not refundable to the depositor in cash"...the funds must stay on deposit during the lifetime of the depositor to be used only to pay his funeral expenses.

Only individuals prepaying their funerals in order to qualify for SSI, Medicaid, or General Assistance may establish an irrevocable account
.
Legislation has been enacted which requires that, once all funeral expenses have been paid, all excess funds remaining in either:

will be forwarded directly to the State of New Jersey if the intended funeral recipient was receiving financial assistance from associated programs at the time of his death.

Assignment of Benefits
from a PRE-EXISTING Insurance Policy

You may fully or partially prefund funeral arrangements through the assignment of existing paid-up whole life or paid-up group life insurance policies.

If this is the chosen method, we recommend your consideration of Sure Trust™ wherein a funeral insurance administration trust becomes the owner and beneficiary of all assigned insurance policies in order to

All excess funds (beyond those needed for funeral expenses) remaining payable as a benefit are ultimately paid to a secondary beneficiary of record as named by the original assignor, after all funeral expenses have been determined and paid.

The Ocean Grove Memorial Home recommends this method of funding predeath funeral arrangements if qualifying life insurance policies are already owned by applicants (who must divest themselves of these assets for Medicaid and SSI purposes).

The purchase of new Funeral Insurance

Funeral Insurance Policies and Funeral Annuities specifically sold to fund a preplanned funeral arrangement may only be issued by a licensed funeral director who is also licensed to sell life insurance. (An annuity is basically a single-premium policy...insurance is usually funded with a series of premium payments.)

Such insurance contracts must have been approved by the New Jersey Department of Insurance to be used in conjunction with funeral preplanning and when offered, the funeral director must disclose that he will earn a commission from selling you this policy.

Upon death, the insurance proceeds are paid directly to the funeral home. The premium for an annuity is the current cost of the prearranged funeral, however,
unlike a trust where the moneys are 100% refundable, insurance and annuity policies are not liquid. You may surrender such a policy at any time, but for only an amount equal to the then-current cash value of the policy (less any indebtedness on the policy). Irrevocable insurance policies and annuity contracts for SSI/Medicaid recipients are non-refundable in cash.

The Ocean Grove Memorial Home does not offer and does not recommend this option for funding funeral prearrangements, although this kind of funding can be arranged through the New Jersey State Funeral Directors' Association at the decision of the arrangor.

You may combine components from the three options listed above to fit your specific needs.

Guaranteed and Non-Guaranteed Plans

In a guaranteed price agreement, the funeral home agrees to provide the goods and services that you select for no more than the amount in the prepaid funeral account at the time of death. This is true regardless of whether the retail value of those goods and services exceeds the amount in the account at the time of death. However, because funeral homes control only about 30% of the total costs of an average funeral, most funeral directors choose not to guarantee their quotation.

If an excess of funds exists at the time of death, the excess funds must be refunded to the owner of the funds or, if he is deceased, to the estate of the decedent.

A non-guaranteed price agreement does not bind the funeral home to provide the goods and services selected if, at the time of death, the value exceeds the funds available. If the value of the account at the time of death is less than that of the goods and services selected, the family has the flexibility to either pay the difference and follow through with the original arrangements or to alter the arrangements to coincide with the funds then available. If an excess exists at the time of death, the excess funds must be refunded to the owner of the funds or, if he is deceased, to the estate of the decedent.

The Ocean Grove Memorial Home does not guarantee the quoted charges for prepaid funeral plans.

 

Before Signing any prefunding contract:

Two of the forces that drive preplanners to fund their funeral prearrangement are the Supplemental Security Income Program (SSI) and the Medicaid Program. Learn more about them by clicking on the SSI/Medicaid link, below.


Links to SECONDARY PAGES in this Master PreArrangement Partition:

SSI/Medicaid - Trust Funds - Sure Trust - Organ Donation - FAQuestions - Philosophy

Limitations, Method and Results of Prepaying

Back to the PreArrangements MASTER Page - Site Table of Contents

Copyright 2001 and 2002-2007 - W¶W™ - William P. Walton, III - All Rights Reserved