PreArrangement Subpage - Limitations, Methods & Results

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PreArrangements SubPage 9

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

Limitations, Method and Results of Prepayment

THE LIMITATIONS OF PREPAYING

We welcome the opportunity to discuss and help prearrange a funeral and we generally recommend the prepaying of funeral expenses. Specifically, we don't accept prepayment for services to be rendered at a later time because of the obvious uncertainty and great likelihood that the costs to the funeral home will change as time goes by. When a person, having made pre-need funeral arrangements for his own (or a beneficiary's) funeral, decides to prepay the ESTIMATED CHARGES of that funeral, we will assist him in placing money aside for the payment of those ACTUAL EXPENSES which will be determined at the time of need.

At no time is it the intent of the funeral home to indicate or imply that the amount deposited by the payor will pay-in-full for the Services, Transportation, Merchandise or Cash Advancements to be provided by the funeral home at the time of death of the beneficiary. The intent is that the principle and accrued interest be readily available at the time of death.

THE METHOD OF PREPAYING

A current estimated total of ANTICIPATED COSTS is determined by the funeral director after a discussion of services, transportation, merchandise and cash advancements has determined the preferences of the payor. This amount, as specified on the estimate form, is used as a base figure; the base figure, representing today's costs, is recommended as the amount to be prepaid. The grantor determines the actual amount to be deposited.

A "payable on death" trust account is opened with the N. J. Prepaid Funeral Trust Fund. The interest accrues in the account.

THE RESULTS OF PREPAYING

At the time of the death of the beneficiary:

The funeral home is notified and proceeds to arrange for the funeral and final disposition as instructed.

The THEN-CURRENT CHARGES for the funeral which has been provided are determined.

A copy of the Death Certificate of the decedent is presented along with a claim form to the trust fund.

The account with the trust fund is closed and all the money in the account (principal and interest) is paid to the funeral home.

If the amount of the deposited money and accrued interest is more than the THEN-CURRENT CHARGES, the funeral home refunds the difference to the GRANTOR or to the ESTATE OF THE DECEDENT (if the decedent was the grantor).

If the amount of the principal and interest is less than the THEN-CURRENT CHARGES, a statement is rendered for the difference.

The funeral home receives neither more nor less than if no prepayment was made.

As a result of recent decisions by the Internal Revenue Service, it is determined that this type of trust is a GRANTOR TRUST and that all income, including that portion which is paid to the N. J. Prepaid Funeral Trust Fund as an administration fee, is taxable to the grantor as set forth under sections 671-678 of the Internal Revenue Code of 1954. An annual statement of income, including allowable deductions and credits will be sent to the grantor or his representative.

Links to SECONDARY PAGES in this Master PreArrangement Partition:

Philosophy - PrePayment - SSI/Medicaid - Trust Funds - Sure Trust - FAQuestions

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