Nebraska burial supervision and advance-payment rights

Nebraska law requires that the interment, disinterment or reinterment of a human body be performed under the direct supervision of a licensed funeral director and embalmer. The one stated exception allows hospital disposition of the remains of a child born dead under section 71-20,121. Ask who will supervise the burial and confirm that person’s license. [1]

A business that sells burial or funeral goods or services in advance must hold a pre-need seller license from Nebraska’s Director of Insurance. Except where the Burial Pre-Need Sale Act provides otherwise, payments on a pre-need sale must be deposited with a trustee within 60 days after the seller receives them. These rules describe money placed in trust under that Act. Ask the seller for its license, the trustee’s name and how your purchase is funded. [2][6][3]

Not every dollar goes into trust. The seller may keep, free of trust, the first 15% of the retail price of most pre-need sales, including markers, monuments, lettering and funeral merchandise or services. It may also keep all proceeds for a lot, grave space, or a crypt or niche in a substantially completed structure; interest it charges you for paying in installments; and amounts required for perpetual or endowed care, if those funds or their earnings will be used to care for and maintain the items you bought. For a crypt or niche in an unfinished structure, the seller keeps the first 35% of the retail price, or all of it if the Director of Insurance has approved a letter of credit or surety bond securing completion. In either case, the seller must agree in writing, as part of the sale, that if the person dies before construction is finished, it will provide an alternate burial and, within a reasonable time after completion, move the body in a dignified manner to the purchased crypt or niche at its own expense. Ask how much of your payment will actually be placed in trust. [4]

Trust earnings above principal can be paid to the seller only after a yearly cost-of-living amount, based on the National Consumer Price Index, has been kept in the trust, and income earned in the current calendar year cannot be paid out. Trust administration costs, including taxes, come out of trust income first, and the seller must cover any shortfall from its own funds. [7][8]

If you cancel a purchase you have not made irrevocable, the seller notifies the trustee, and within 90 days the trustee pays you the amount the seller was required to hold in trust for you, minus any reasonable trustee charges caused by the cancellation. Any balance left in your trust account then goes to the seller. Amounts the law let the seller keep outside the trust are not part of that trustee payment, so ask what your contract says about them before you cancel. [7][4]

At your written request, a limited amount of the money placed in trust can be designated irrevocable. The limit is adjusted every September 1 under rules of the Department of Health and Human Services. Cancelling an irrevocable purchase does not produce an immediate cash refund under this section. The trustee pays the seller any excluded amounts it has not already kept and holds the required trust amount in an individual account in your name. That account is paid to you or your estate within 90 days after the death of the person it was for, or, at your written request, transferred within 90 days to an irrevocable trust with another licensed seller, minus reasonable trustee charges caused by the cancellation. [5][7]

If you stop paying, the seller may keep the money already in trust for that purchase until you give notice of cancellation or the person it was for dies, whichever comes first. If the person dies first without a cancellation notice, the law treats the purchase as cancelled. [7]

The Director of Insurance can deny, suspend or revoke a pre-need seller’s or agent’s license, or impose a fine of up to $1,000 per violation after notice and a hearing. [9]