MFDA MASTER ESCROW PLAN
Answers to commonly asked questions.
What happens
to the money that I paid the funeral director?
The money is deposited in the MFDA Masters Escrow Plan.
A subsidiary of the Michigan Funeral Directors Association administers the
Plan. The Association is located in the Lansing area and has been serving
its members and the public since 1880. You will receive a letter acknowledging
the deposit of funds into the MFDA Master Escrow Plan. If you do not receive
such a letter within six weeks of your payment, please notify the funeral
director immediately.
What should
be done when death occurs?
Your family should call the funeral home at which the
funeral was preplanned immediately. They are available 24 hours a day, 7 days
a week. Even if death occurs away from your local area, you should still call
the funeral director back home. He will make the necessary professional contacts
for you, including, if necessary, a funeral home in the location of the death.
Although the funeral home will usually remember or know from their records,
be sure to remind them that there is a prepaid funeral agreement.
Will more money have to be paid
when the funeral is actually help?
If the contract is designated as a "guaranteed price
agreement," it has been paid in full, and there are no changes in the choice
of services and merchandise, the answer is "no" for any of the goods and services
listed on the contract and accompanying documents. If it is designated as
a "non-guaranteed price agreement," the family will be responsible for any
difference between the current charges at the time of the funeral for the
goods and services selected and the amount in the escrow account. If you are
not sure which kind of agreement you have purchased, refer to your contract
or ask the person with whom you set up the agreement.
What if I move
away or change my mind?
The contract can be canceled at any time for any reason
and, by law, you are entitled to receive a minimum 90% refund of both your
original payment and accumulated income in your escrow account. Just notify
the funeral director and he will be happy to make different arrangements or
give you a refund within 30 days. (NOTE: Some contracts may be certified "irrevocable"
by the Department of Social Services in order to allow a person to become
eligible for Medicaid assistance. Irrevocable contracts cannot be canceled
for any reason, although it is normally possible to transfer performance of
the contract to another funeral home.)
Who pays
taxes on the income in the escrow account?
Under rulings of the U.S. Internal Revenue Service, the
owner (normally the purchaser) of the contract has the tax responsibility.
Accordingly, you will have been asked to sign an IRS W-9 form. You will be
mailed a statement each January setting out the amount of money you need to
add to your taxable income. Normally the resulting amount of tax is very small.
What should
I do if I have any questions or have a complaint?
Contact the funeral home with which you have the pre-arrangement.
Normally they can handle any questions or problems you might have. In the
rare instance that you do not receive satisfaction from you contact with the
funeral home, you may contact the MFDA Master Escrow Plan at (517) 349-9565,
but it is more convenient for everyone if you always contact the funeral home
first.