Prepaid funeral contracts and cemetery plots in Texas

A prepaid funeral contract lets you choose and pay for a funeral ahead of time. In Texas, every seller needs a permit from the Texas Department of Banking, and you can check that permit before you sign. Keep the contract, the cemetery papers and the seller's name with your family plan, so no one has to search for them.

Who oversees prepaid funerals in Texas?

The Texas Department of Banking. Any funeral home or cemetery that sells prepaid funeral goods or services needs a permit from the Department, or must sell through a permit holder. Check a seller on the Department's prepaid funeral site or at 1-877-276-5554. Sources: Texas Department of Banking, prepaid funeral consumer site, Texas Department of Banking, prepaid funeral brochure.

Trust-funded or insurance-funded?

Texas contracts are paid for in one of two ways: through a trust or through an insurance policy or annuity. It matters if you cancel or move:

Canceling. Give the seller written notice; the seller has 30 days to refund. For most trust-funded contracts, you get what you paid minus 10% of the face value, plus half the net earnings on contracts sold after September 1, 2001 and held over a year. For insurance-funded contracts, you get the policy's cash surrender value, which is often less than what you paid.
Moving to another funeral home. A trust-funded contract can't be transferred. Insurance proceeds can be reassigned to a different provider. Either way, the new provider doesn't have to honor the old prices.

Sources: Texas Department of Banking, prepaid funeral FAQs, Texas Department of Banking, prepaid funeral brochure.

What if the seller can't deliver?

Texas keeps a prepaid funeral guaranty fund, which the Department of Banking maintains, to guarantee that sellers and funeral providers perform on these contracts. If something seems wrong, call the Department. Sources: Tex. Finance Code ch. 154, Texas Department of Banking, cemetery and prepaid funeral businesses.

How does a family find the contract?

Look through the person's papers first. On a Texas contract, the seller's preprinted name and permit number should be at the top of page 1. With that, you can call the funeral home and the Department of Banking. Source: Texas Department of Banking, prepaid funeral FAQs.

Who handles which complaint?

The prepaid contract or a perpetual care cemetery: Texas Department of Banking, (877) 276-5554.
The insurance policy that pays for the contract: Texas Department of Insurance, (800) 252-3439.
A funeral home or funeral director: Texas Funeral Service Commission, (888) 667-4881.

Cemeteries owned by cities, churches or other nonprofits generally aren't supervised by the Department of Banking. Sources: Texas Department of Banking, cemetery and prepaid funeral businesses, Texas Department of Banking, how to file a complaint.

Cemetery plots

A perpetual care cemetery needs a certificate of authority from the Department of Banking. When you buy a plot, ask what else you'll pay for: most cemeteries require a grave liner, opening and closing the grave usually costs hundreds of dollars, and perpetual care isn't always included in the price. Sources: Texas Department of Banking, cemetery and prepaid funeral businesses, FTC, buying a cemetery site.

Your rights under the FTC Funeral Rule

Funeral homes must give prices by phone if you ask, and a General Price List you can keep when you meet in person. You can buy only what you want, and a funeral home can't refuse a casket or urn you bought somewhere else. The Rule doesn't cover cemeteries without an on-site funeral home. Our guide to what a funeral costs helps you read the list. Source: FTC, the Funeral Rule.

Keep these with your family plan

[ ] The prepaid contract, with the seller's name and permit number.
[ ] The insurance policy or trust papers that fund it.
[ ] The cemetery contract and any deed or certificate for the plot.
[ ] Receipts for what's been paid.
[ ] Your wishes: burial or cremation, the service, the place.

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Frequently asked questions

How do I check a prepaid funeral seller in Texas?

Look up the permit on the Texas Department of Banking's prepaid funeral site, or call 1-877-276-5554.

Can I cancel a prepaid funeral contract in Texas?

Yes, with written notice to the seller. The refund depends on whether the contract is trust-funded or insurance-funded.

Does a new funeral home have to honor my old prices?

No. If the contract moves to a different provider, the new provider does not have to honor the frozen prices.

Is this legal advice?

No. It is general information from the Texas Department of Banking and the FTC.

Sources

General information, not legal or financial advice. Rules change; check the official sources above or talk to a licensed professional about your situation.