How can I be sure the funds in my PrePlan account are safe and will be there when they are needed?
Consumers in New York who prepay their funeral expenses enjoy the full benefit of having their funds protected by the strongest preneed laws in the nation. These laws require that 100% of your preneed funds be deposited into an interest-bearing, government backed trust account.
Preplan also voluntarily submits the trust fund to an annual audit to ensure the transparency and accuracy of our reporting.
In addition, PrePlan works on behalf of its member funeral homes and their consumers by investing solely in certificates of deposit with a diversified group of highly-rated banks. Each accountholder in PrePlan is federally insured.
Following are some commonly asked questions and answers specific to your PrePlan trust account. If you have any additional questions, please contact the funeral home with which you set up your account.
Who actually owns the funds in a preneed account?
Until the funeral home has provided the merchandise and services, the purchaser whose funds were used to open the account remains in control of the account and can change arrangements and/or their choice of funeral home at any time. If the account is “revocable,” a purchaser may request a full refund of the principal and interest earned at any time, for any reason, without penalty.
My mother is applying for Medicaid; can she set aside funds by opening a preneed account to pay for her future funeral and burial expenses?
Yes, New York State allows an individual applying for Medicaid or Supplemental Security Income (SSI) to set aside funds in an “irrevocable” account for these very expenses. These funds are considered an “excludable asset,” meaning they are not counted as a resource when determining eligibility. However, any funds set aside in an irrevocable account may not, by law, be refunded to the purchaser. In addition, any overage in funds remaining in the account after expenses are paid must be sent to the appropriate department of the county where the beneficiary was living at the time of his/her death.
A Medicaid/SSI applicant also has the option of setting funds aside to pay the funeral/burial expenses of certain family members. Any account established for the benefit of a family member must, under New York State law, also be irrevocable, as any and all funds in such account would be an “excludable asset” as well.
If my account is “revocable” and there is a balance left after my funeral expenses have been paid, where does this overage go?
Any funds remaining in a revocable account must be remitted to the purchaser, if different from beneficiary, or to the estate of the beneficiary (decedent).
What happens if the funeral home I make arrangements with goes out of business?
The funeral home must, by law, inform each individual who has prefunded a funeral with them of this fact. They must also advise the consumer of their right to transfer their prearrangements to any other funeral home they choose, or, if revocable, receive a refund of their total deposited amount plus all interest earned.
I received my annual Grantor Trust Tax Information Statement from PrePlan; what amount do I report on my taxes for interest income?
It is the “Gross Taxable Interest” amount as printed on the trust tax statement that must be reported on your income tax return. For more tax information, including tax reporting terms.
What are the fiduciary and advisory fees disclosed in my preneed agreement for?
As with any trust in New York State, PrePlan is permitted by law to expend up to three quarters of one percent of the balance in the fund to provide the necessary services to operate and staff the trust. This is one of the lowest fees in the nation. In addition, a minimal advisory fee is also paid for the expert investment advice given to PrePlan for the direct benefit of its customers. These terms are fully disclosed in the preneed customer agreement provided to all customers.
Is PrePlan accredited by the Better Business Bureau?
Yes! PrePlan is proud to have earned an “A+ excellence rating” by the highly regarded Better Business Bureau (BBB). This designation was awarded following a successful review and BBB background check. With the strongest consumer laws in the nation and BBB accreditation. New York State consumers can be confident that their prepaid funeral funds are well protected with PrePlan.