New Jersey Prepaid Funeral Trust Fund
For 30 years, consumers and funeral directors alike have confidently trusted the New Jersey Prepaid Funeral Trust Fund™ as their vehicle of choice for a consistent, straightforward and dependable way to prefund their funerals. Operated by the New Jersey State Funeral Directors Association, Inc. (NJSFDA), the trust fund is offered at more than 600 funeral firms throughout New Jersey.
Currently administering more than 51,000 consumer accounts, the trust fund has grown to more than $324.7 million in trusted accounts since its inception. In 2010, the net growth of the fund was more than $12.7 million, including interest, deposits and withdrawals. The annualized net yield to each consumer account was 3.63 percent.
All funds are deposited in a state or federally chartered bank, with each account insured by the Federal Deposit Insurance Corporation (FDIC) in the name of the purchaser up to $250,000.
The New Jersey Prepaid Funeral Trust Fund™ receives one percent (1%) of the fund’s principal sum for management, administration and overhead costs.
The New Jersey Prepaid Funeral Trust Fund™ (NJPFTF) is the state’s premier funeral preplanning funding product and has grown to be one of the largest funeral trust funds in the United States. The NJPFTF’s assets, as required by law, are fully insured by the Federal Deposit Insurance Corporation (FDIC).
All funds are invested in jumbo certificates of deposit which allow the trust to offer competitive interest rates and growth from the day of deposit. The trust fund meets all federal and state regulations for prearrangements, and also meets the requirements for SSI, Medicaid, Work First New Jersey and Work First New Jersey General Assistance resource exclusions.
The trust is managed by a knowledgeable and professional staff, a certified public accountant and a Board of Trustees made up of NJSFDA member funeral directors. Participation in the NJPFTF™ is limited to funeral directors who are members in good standing of the NJSFDA and who have agreed to abide by the high consumer protection standards set by the fund’s Board of Trustees.
SSI/Medicaid and Pre-Paid Funerals
If you need to apply for SSI/Medicaid or General Assistance in New Jersey, you are permitted to set aside money to pay for your funeral. (Note: you cannot set aside funds to pay for a repast.) Doing this will not affect your eligibility for assistance. In most cases, it makes good financial sense to preplan and prepay.
Prepaying a funeral before SSI or Medicaid acceptance allows you to select the funeral of your choice before your assets are used up for medical care. To learn more about eligibility requirements, limitations and guidelines on SSI/Medicaid or General Assistance, contact your county's social services office, a social worker at a local nursing home or an elder law attorney.
When You Are Ready to Preplan
We recommend contacting a funeral home that participates in the Funeral Planning CHOICES preneed program of the New Jersey State Funeral Directors Association. Participating funeral directors can provide you with up-to-date information on prearranging funerals. CHOICES programs meet all SSI, Medicaid and General Assistance rules and regulations. Payments made for the funeral will be kept in an irrevocable account.
Recovery of Excess Proceeds by the State
New Jersey has enacted laws that enable the state to recoup a small portion of the money it spends each year on the SSI/Medicaid program.
Once all funeral expenses of an SSI/Medicaid recipient have been paid, any funds remaining in an irrevocable trust fund opened on or after February 27, 2000 or in a newly issued insurance policy purchased and irrevocably assigned on or after February 27, 2000 must be sent to the state. Irrevocable trust funds opened or insurance policies purchased for the payment of funeral expenses prior to February 27 are not affected by these rules.
Applicants for SSI/Medicaid and General Assistance should make arrangements that are reasonable and consistent with their lifestyle.
FOR MORE INFORMATION PLEASE VISIT: njsfda.org