Delaware funeral decisions, perpetual care and prepaid-plan rights

Delaware law sets the order of people who control the disposition of a person’s remains and the ceremonial arrangements. The person’s own declaration instrument comes first, then a surviving spouse who was not legally separated, then the appointed personal representative or administrator, or the person nominated in the will if no one has been appointed. Next come a majority of the adult children, the parents or legal guardians, a majority of the adult siblings, and then the next degree of kin. If the agreement needed among children, parents or siblings cannot be obtained, a final judgment of the Court of Chancery is required. Ask the funeral home whom it has recorded as having the right to decide. [1]

When a business that sells burial lots with perpetual care for profit sells a lot with perpetual care, it must deposit at least one-tenth of the lot’s gross sales price with a bank or trust company acting as trustee of a permanent lot care fund. The trustee must pay the fund’s net income at least twice a year for the perpetual care and preservation of the lots sold with perpetual care. Businesses selling burial lots must keep records showing each purchaser, whether the lot was sold with perpetual care and the gross price, and make them available to the Attorney General for inspection. Ask whether your lot is being sold with perpetual care, and get the answer in writing. [2]

Delaware treats payments made in advance for funeral services or merchandise as trust funds. The person or business receiving them must deposit all payments in a trust account with an insured bank or credit union within 30 days of receipt, and interest and other earnings stay with the principal. Unless the money is refunded or placed in an irrevocable trust, it stays in trust until the death and until all merchandise has been delivered and all services performed; any balance left after paying for them goes to the beneficiary’s estate. Ask which institution holds your trust account. [4][7]

Except for an irrevocable trust, anyone who has paid for a preneed funeral service may demand a refund of the entire amount actually paid, together with all interest and other earnings, by giving 15 days’ written notice. Ask the seller to confirm in writing where that notice should be sent. [5]

A buyer may instead choose, at any time, to place all or part of the payments in an irrevocable trust. The statute says that at no time shall such funds exceed $15,000. The 15-day refund right does not apply to an irrevocable trust, so check that choice carefully before you make it. [6][5]

These rules have limits. Chapter 34 does not cover the furnishing of a cemetery lot, mausoleum or memorial, and the trust requirement does not apply to funeral services or merchandise sold as burial insurance policies regulated by the Insurance Department. Apart from insured banks and credit unions, anyone who accepts or holds preneed payments needs a license from the State Bank Commissioner, and each licensee must file a bond, or a letter of credit the Commissioner accepts, of between $50,000 and $200,000. Ask whether your plan is trust-funded or insurance-funded, and ask to see the seller’s license. [3][4][8][9]