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Pre-planned funerals have become a reality for many families. Personal, financial, and legal considerations make pre-planning desirable. For those who pre-pay funerals, the guidelines provided by law specify that funds be held in trust by an independent financial institution. Methods of Pre-Funding funerals include: Funeral trusts Funds may be placed in a trust fund deposited in a Massachusetts bank to be invested and earn interest. Interest remains in the trust and is reinvested. The funeral purchaser is responsible for the income taxes on the earnings. For most people the earnings are small enough as to be of no consequence and will not effect people who already pay no tax. For this service we use The New England Funeral Trust™. Preneed Insurance Policies or Annuities A person planning a funeral buys a policy of life insurance and directs payment of the death benefit to the funeral home. Preneed insurance or annuities may be sold by a licensed funeral director only if the director is licensed as an insurance agent or broker. Death benefits are generally exempt from income tax liability to the insured on the growth of the policy death benefit. We offer the finest funeral insurance services available, so that you and your family can plan and prepare for the future. Our plans guarantee that the arrangements you make today will be available just as you specified, without additional cost. Pre-need funeral insurance is a simple, safe and secure means of funding your arrangements. Plans can be tailored to suit individual needs. Payment plans are available or your existing insurance policies can be used to fund your pre-planned funeral. Traditional Life Insurance and Annuities Traditional life insurance policies are sold by a licensed insurance agent or broker which can be used to pay for funeral expenses. Traditional policies may be sold by a funeral director if the director is licensed as an insurance agent. The death benefit of such policies can be assigned to the funeral home. Separate Bank Account A bank account may be established in a Massachusetts bank for the purpose of funding a funeral arrangement. The interest will increase over time. The interest earned each year is subject to income tax. |
