Advance Funeral Arrangements and Pre-Need Funeral Plans

Colorado currently permits two methods of funding for “preneed” funeral plans.

With a Trust-Funded preneed contract, a consumer purchases specific funeral services and merchandise at a guaranteed price from a preneed contract seller. A written contract detailing the types of services and/or merchandise being purchased is required. The consumer pays the preneed contract seller a sum of money, either on an installment payment plan or in a single payment transaction. The preneed contract seller is then required by Colorado law to place a minimum of 75 percent of these funds in a trust account with a qualified trustee.

Under the Insurance-Funded preneed contract, the consumer purchases a life insurance policy and the policy proceeds are used to pay for the funeral. The funeral home or mortuary is the insurance policy assignee and is paid directly by the insurance company after performance of the preneed contract. All cost increases incurred by the funeral home or mortuary at the time of need are paid out of the benefits from the life insurance policy up to the seller's current price list. It is important to note that these arrangements involve two separate contracts, the preneed contract and the life insurance contract which is used to fund the preneed contract.

Whichever prefunding option you select, be certain that the funeral home, mortuary, cemetery, or licensed insurance producer you choose is licensed with the State of Colorado as a “preneed contract seller.” For more information, log onto the Colorado Division of Insurance web site at: www.dora.state.co.us/insurance  or call 303-894-7499.

Here are some additional consumer caution tips from the Colorado Division of Insurance:

• If it sounds too good to be true, it usually is. Beware of prices that are significantly lower than others you've been quoted.

• Give yourself enough time to investigate; don't be rushed into a decision.

• Examine the policy to determine the actual coverage to make sure the promised benefits are FULLY insured by a licensed insurance company.

• Always pay with a personal or business check, or a cashier's check, not cash.

• Always obtain a receipt for any monies paid.

• A policy will be provided to you, if you have purchased legitimate insurance.

NFDA Bill of Rights for Funeral Preplanning ⁵
An ethical and reputable funeral home will ensure the following rights and protections:

1. Provide you with detailed price lists of goods and services before you make your selections.
2. Provide to you, at the conclusion of the funeral arrangement conference, a written statement listing all of the goods and services you have purchased and the price.
3. Give you a written preneed funeral contract explaining, in plain language, your rights and obligations.
4. Guarantee in the contract that if any of the goods or services you have selected are not available at the time of need, goods and services of equal or greater value will be substituted at no extra cost.
5. Explain in the contract the geographical boundaries of the funeral home’s service area and under what circumstances you can transfer the preneed contract to another funeral home if you were to relocate, or if the death were to occur outside of the service area.
6. State in the contract where and how much of the funds you pay will be deposited until the funeral is provided.
7. Explain in the contract who will be responsible for paying taxes on any income or interest generated by the preneed funds that are invested.
8. Inform you in the contract whether, and to what extent, the funeral home will guarantee the price of goods and services you are purchasing. If the prices are not guaranteed, the contract will explain who is responsible for any additional amounts that may be due at the time of the funeral.
9. Explain in the contract whether and under what circumstances you may cancel your preneed contract and how much of the funds you paid will be refunded.

There are several methods available to pre-pay for a funeral:

• A regulated trust can be established by a licensed funeral director.
• A life-insurance policy can be purchased, equal to the value of the funeral.
• Individuals can establish a savings or certificate of deposit account earmarked for funeral expenses, designated as “payable on death” to the funeral home.

Each method has its advantages. To help determine which option is best for you, make sure to ask your Funeral Director the following questions:

• Who receives the interest on the account?
• Who must pay taxes on the interest?
• Is the prepayment ever refundable, in part or in full?
• Can the plan be used at a funeral home of your choice?
• What happens if the funeral home goes out of business or is sold?
• In the event that you move, is the prefunded plan transferable?

Copyright, National Funeral Directors Association.

Certification for Funeral Service Practitioners

Colorado does not license individual funeral service practitioners. Colorado's Legislative Assembly abolished the licensing system in 1982.
 
The Colorado Funeral Service Board (CFSB) -- previously called the Mortuary Science Commission -- was created in 1982 by the funeral service industry to promote professionalism under a voluntary system of certification, registration and the development and maintenance of standards. Participation in the CFSB's professional certification program is strictly voluntary. By maintaining strict standards, CFSB certification is recognized by other state licensing boards for reciprocal requirements.

Individuals may apply for certification in four categories based on sufficient education, training and experience and must agree to maintain the standards and ethics of the CFSB.

• Certified Mortuary Science Practitioner (CMSP)
• Certified Funeral Director (CFD)
• Certified Embalming Technician (CET)
• Certified Intern/Trainee (INT)

More than 225 funeral professionals have stepped forward, without the pressure of state mandate, and invested their own time, plus the cost of registering and maintaining professional standards and obtaining continuing education -- all on a voluntary basis. We salute these professionals for carrying the standards in our state.
 
These individuals have committed to upholding high ethical standards, a high degree of professionalism, continued practical competence and ongoing education that will benefit consumers and the funeral service profession in Colorado. Click here for a list of the individuals who are currently certified by the CFSB.
 
Ask your funeral service provider if they are certified by the Colorado Funeral Service Board and request to see their CFSB certificate for the current year. Certifications must be renewed each calendar year.

How to File a Complaint about a Funeral Service Provider

Consumers may file complaints in two ways:

1. The Colorado Department of Regulatory Agencies (DORA) will address written complaints about funeral establishments and crematories.  Click here to go to DORA's web site and learn more details about how to file a complaint.

2. The Colorado Funeral Service Board may also assist consumers in resolving complaints.

Filing a Complaint to CFSB

Anyone may file a complaint, but must do so in writing and must sign the complaint within one year of an incident. The complaint should include a detailed account of the facts involved in the case and should be specific about the expected resolution.

Written complaints should be addressed to:

Colorado Funeral Service Board (CFSB)
P. O. Box 631664
Highlands Ranch, CO 80163-1664

After someone files a complaint, a CFSB Representative makes a preliminary determination that the complaint is directed against a CFDA member firm or an individual certified by the CFSB, and alleges an act or omission that could violate the association's constitution, bylaws, or standards of practice.

The CFSB representative may attempt to mediate between the parties to reach a mutually agreeable resolution.

The CFSB may decline to take action if the matter is the subject of a complaint filed with another state or involves a legal matter.

The CFSB may recommend that the complaint be reported to legal authorities if it is determined that the matter of the complaint is in violation of the state laws.

The CFSB may also refer the complaint to another entity or jurisdiction, or dismiss it.

Beginning January 1, 2010, the Colorado Department of Regulatory Agencies' Office of Funeral Establishment and Crematory Registration will address complaints filed against funeral homes and crematories.

For more information, go to http://www.dora.state.co.us/funeralhome-crematory/index.htm

You may also contact:

Office of Funeral Home and Crematory Registration
Division of Registrations, Department of Regulatory Agencies
1560 Broadway, Suite 1350
Denver, Colorado 80202
Telephone: 303.894.7800
Fax: 303.894.7790
Email: Funeral@dora.state.co.us

Colorado Mortuary Science Regulations

Although funeral directors are not licensed by the State of Colorado, it is not accurate to say funeral service in Colorado unregulated.

The Colorado Mortuary Science Code, C.R.S. 12-54-101, covers the practice of funeral service, definitions, basic practice standards and prohibited acts. This act is enforced through county attorneys and the office of the Colorado Attorney General,  as well as all appropriate state and federal agencies under which certain acts may apply.

Beginning January 1, 2010, all funeral establishments and crematories must be registered with the Colorado Department of Regulatory Agencies.

The Disposition of Last Remains Act, C.R.S. 15-19-101, covers the rights to control and protocol to determine the disposition of last remains after death.

To read specific statutes go to http://www.colorado.gov/colorado-government/ and click on "search for Colorado laws". Be sure to reference the statute numbers listed above.

There are several other state and federal regulations for funeral service providers including:

• filing and maintenance of vital records;

• regulations for trusts, insurance and preneed funeral contracts;

• laws that pertain to the waste disposal and emissions from funeral homes, cemeteries and crematories;

• disclosure of products and price lists;

• state laws that cover cemeteries;

• occupational requirements for employee health and safety

For more information on these laws, click here.