What happens to funds in a trust as specified in the prearrangement contract?

In Washington, funds placed in a trust as part of a prearrangement contract are specifically designated for funeral and burial services. When a consumer enters into a prearrangement contract, their funds are typically deposited into a trust to ensure that the funeral services will be available when needed.

The provision regarding refunds with net accruals highlights a significant consumer protection aspect of these contracts. If the individual who has made the arrangements decides to cancel the contract, they are eligible to receive their funds back, but only after accounting for any fees or necessary deductions. These net accruals may include any interest that the trust has generated over time or other related expenses. This ensures that consumers are protected and that their advance payments are not lost if circumstances change.

In contrast, funds being considered profits for the funeral home or being used for general business expenses do not align with the purpose of a prearrangement trust, which is specifically meant to secure services for a designated purpose. Additionally, while there may be cases where funds might be non-refundable under certain conditions, this is not universally applicable to all scenarios in a prearrangement context, emphasizing the importance of the refund provision when a contract is canceled.