A new state law will help consumers learn more about what to look for in funeral contracts that are prepaid.
The law requires funeral providers to give clients a fact sheet from the state Department of Consumer Protection before they sign a contract. It offers guidance about things like fees and how money will be used.
State lawmakers drafted the rule in response to a high-profile case of alleged misconduct. A Connecticut funeral home director was charged last year with embezzling money from dozens of clients.
Jonathan Green, president of the Connecticut Funeral Directors Association, said fraud is unusual, but consumers should still be informed.
“Education is really imperative for their own self-agency to recognize any potential red flags in the contract process," Green said.
Green said funeral directors around the state have gotten calls from people seeking help, including after a death occurred. Some families discovered money paid in advance toward funeral services was missing or wasn't invested where they thought, he said.
All of the money for a prepaid funeral service contract, also known as a “pre-need” contract, is meant to be held in escrow and placed into an investment or used to fund insurance policies.
DCP Communications Director Kaitlyn Krasselt said issues with prepaid funeral contracts are rare, but “it can be really devastating.”
Green said these contracts can be complicated even for those who have planned a funeral before. They're meant to give loved ones peace of mind that they don’t have to plan or pay for a funeral.
“All of that has been stripped away,” Green said, describing the alleged cases of fraud. “And we find it's important to restore that peace of mind again.”
Lawmakers established a new working group to consider issues surrounding prepaid funeral contracts. That group must report its findings by December 2027.
Green said he hopes it will result in more oversight of funeral directors.
The new law also creates a fund that will repay eligible victims of fraud up to $10,000 for a funeral service contract. Green said for many people that amount is enough to make their contracts whole, depending on the arrangements.
The money will be allocated in the next fiscal year, beginning July 1, 2027.
