Pre-Need Contracts

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As of today, July 27, 2017, funeral directors in Massachusetts must comply with the recently revised state regulations about Pre-Need Contracts.

"The provisions of 239 CMR 4.00 shall apply in full to all Pre-Need Funeral Contracts which are established on or after July 27, 2017.  

Funeral directors no longer have the option of directly handling money paid for pre-need contracts. In the past, they could accept cash or checks payable to them, with the proviso that within five (5) business days those funds had to be deposited into a Funeral Trust Account or paid to an insurance company for the purchase of a pre-need insurance policy or annuity. They were not allowed to use those funds for any personal or business expenses. 

This change in Massachusetts regulations protects the consumer. Most funeral directors properly complied with the older regulations, but a few took advantage of the direct payments, sometimes delaying or failing to set-up the proper accounts for customers. In South Hadley, from 2001 to 2014, one director (Wm Ryder) managed to embezzle over $430,000 from customers. See the article in our Spring 2017 newsletter (pages 4-5) entitled "Aftermath of the Ryder Scandal” for information about this problem and the ensuing reform of state regulations.

I attended some of the hearings and meetings in Boston during this reform effort, and can report that the Board of Registration of Funeral Directors and Embalmers (in the MA Division of Professional Licensure) worked hard to improve the regulations. The funeral directors who serve (as volunteers) on that Board were eager to close the loopholes, and they welcomed us (representatives from FCAWM and FCA of Eastern MA) at those meetings. 

You can find links to the entire set of updated regulations here.  CMR means Code of Massachusetts Regulations; 239 is the section for the Bd of Registration of Funeral Directors and Embalmers. For the section on Pre-Need Contacts see

 239 CMR 4.00: Pre-Need Funeral Contracts and Arrangements

As our readers and members know, FCAWM cautions against pre-need contracts, except in the special situation of “Medicaid spend-down.”  We do advocate pre-planning, but not pre-paying. Why not pre-pay? I recommend these resources for explanations of the reasons, and alternatives:

Should You Prepay For Your Funeral? (FCA)

3 Reasons You Should Never Prepay Funeral Expenses (Motley Fool)

If you have already prepaid, be sure you (and your next-of-kin) know where the contract or policy is, and what provisions there are in case you chance your mind or move to another state, or have other reasons to make changes.

Disclaimer: The views, opinions and positions expressed here in "Sandy's Blog" are written by one individual (volunteer Sandy Ward) and may or may not reflect the views, opinions or positions of the Funeral Consumers Alliance of Western Massachusetts.