Prepaid Trust Fund
The Benefits of Preplanning
Preplanning your own or another’s funeral has many benefits. Not only do you get to ensure that the funeral will reflect your wishes, but you also can make sure there is money designated for and readily available to pay for it. Preplanning also has the added benefit of alleviating family or friends from having to make important decisions or face financial concerns at a very stressful time.
But how do you begin?
Start with the New Jersey Prepaid Funeral Trust Fund™ (NJPFTF), the largest prefunding product in New Jersey and one of the largest funeral trust funds in the nation. A commingled (pooled) trust is managed by the New Jersey State Funeral Directors Association, Inc. The NJPFTF currently administers more than 45,600 consumer accounts in more than 600 funeral home locations.
For over 30 years, the NJPFTF has grown to just under $340 million in trusted accounts. All trust fund deposits are fully insured by the Federal Deposit Insurance Corporation (FDIC) in a state or federally chartered bank. In addition, the Trust Fund meets all federal and state regulations for prearrangements, and adheres to all requirements for SSI/Medicaid and the prepaid funeral resource exclusion.
How the New Jersey Prepaid Funeral Trust Fund™ Works
The New Jersey Prepaid Funeral Trust Fund™ places your money in an FDIC insured account so you can be sure it is safe. Your money stays in your name as beneficiary and is completely refundable except in the case of SSI/Medicaid*. Should you need to apply for a public assistance program in the future your trust account can be converted to qualify as an excludable resource.
To earn the highest possible rate of return available from jumbo certificates of deposit your money is pooled with thousands of other accounts. The interest earned over time helps offset the costs of inflation. As long as you fully prepay your prearranged funeral, and do not withdraw any principal or interest, your funeral director should be able to provide you with the funeral of your choice at the time of need.
Unlike traditional savings accounts, which may close or become inaccessible at your time of death, your New Jersey Prepaid Funeral Trust Fund™ account will be immediately available.
* SSl/Medicaid requires that any moneys used to prepay a funeral be held in an irrevocable account, and that any excess money remaining after payment of funeral expenses be paid to the State of New Jersey.
Where to Begin
Talk with your family and close friends and let them know of your desire to preplan. It is important for them to know that you are making these prearrangements. Your next step is to make an appointment to meet with your local funeral director to discuss the kind of funeral you are interested in planning. If possible, bring a family member or friend with you to help you make your decisions.
Your funeral director will help you select the specific services and merchandise (including type of ceremony, viewing hours, memorial service, casket and place of committal) to meet your needs. Once your prearrangement choices are completed, your funeral director will provide you with an itemized statement listing your choices and their charges, along with your trust fund agreement.
When your arrangements are finalized you will be required to write a check directly to the New Jersey Prepaid Funeral Trust Fund™ for the cost of the funeral. You may choose to pay in full, or make a minimum payment of $500 and arrange a payment plan with your funeral director (some restrictions may apply). Within 10 days, you will receive a confirmation of your account directly from the Trust Fund.
It’s that simple.
- Your account is 100 percent trusted and refundable upon demand, with interest and without penalty, and is transferrable to another participating funeral home.**
- The NJPFTF is insured by the Federal Deposit Insurance Corporation (FDIC) up to the limits provided by law.***
- The NJPFTF is able to obtain the prevailing rates of jumbo certificates of deposit (CDs) by pooling the accounts of thousands of prepaid agreement owners.****
- All NJPFTF prepaid funeral accounts are excludable as resources for SSI/Medicaid purposes for qualified beneficiaries.
- The NJPFTF provides annual tax statements and a summary of your account and interest earned (reportable as income if you are required to file with state and federal tax agencies).
- All account balances may be viewed online at www.njsfda.org/myaccount
- There are no age limits and no health questions. This is not insurance.
- ** By law, accounts established for SSI/Medicaid eligibility purposes are not refundable.
*** Currently, the FDIC protects the deposits of any one insured with any one bank up to $250,000.
**** The New Jersey Prepaid Funeral Trust™ receives a one (1) percent management fee annually for the administration of your account, payable out of income.