Vermont cremation, cemetery care and prepaid-funeral rights

In Vermont, a disposition facility is a business registered with the Office of Professional Regulation at a specific address for cremation, alkaline hydrolysis or natural organic reduction. Its personnel may enter into contracts for those dispositions, but without taking prepaid funds. If you want to pay for a cremation in advance, ask whether the business taking your money is a funeral establishment and how the money will be held. [1][2]

A cemetery association established after June 1, 1933 must create a perpetual care fund from the initial proceeds of lot or space sales, equal to at least 20% of the sale price of each lot or space sold. An association established before that date may create such a fund but is not required to by this section. Ask when the cemetery association was established and how much of your payment goes to perpetual care. [3]

A funeral establishment that sells services or merchandise not to be delivered or provided within 30 days of sale has entered into a prepaid funeral arrangement and must follow the state’s prepaid funeral law. That law directs the Director of the Office of Professional Regulation to adopt rules for the proper handling of all funds paid and to protect consumers if a provider defaults. An escrow account must be maintained by a federally insured depository institution. Ask where your escrow account will be held. [4][5][1]

Vermont also has a Funeral Services Trust Account, used only to protect prepaid funeral contract holders if a funeral establishment or disposition facility defaults on its contract. It is funded by a $6.00 fee for each funeral, burial or disposition, which is not charged in a fiscal year that begins with at least $200,000.00 in the account. Ask the funeral home how you would make a claim if it could not perform. [5]

A buyer may transfer a revocable or irrevocable contract and its assets to another funeral director, in Vermont or elsewhere, and the original funeral director may charge a transfer fee of no more than 5% of the principal. A funeral director must transfer contracts and assets if the business is sold, becomes insolvent or bankrupt, or stops doing business, and before transferring because it is stopping business it must notify the buyer, who may choose the new funeral director. Ask what fee, if any, would apply to a transfer. [6]

If the buyer defaults on payments, or if the funeral director is not used to provide the services, the funeral director may keep up to 5% of the amount in the escrow account at the time of default, and the escrow agent pays the balance to the buyer. Escrowed assets, including earnings, are not available to the funeral director and are protected from the funeral director’s creditors, except as the law provides. Ask for a statement of what is in escrow for your contract. [6]