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3 Major Changes to the Ontario Funeral, Burial and Cremation Services Act

bigstock-Mourning-woman-on-funeral-with-47269159On July 1 2012 the new Ontario Funeral, Burial and Cremation Services Act comes into effect.  There are 3 major changes in the legislation concerning prepaid funeral contracts.  They are:

  1. The Funeral home must guarantee all goods and services listed on the prepaid contract.
  2. Funeral Homes may not accept prepayment for cemetery related services.
  3. The administration fee has increased.

Each of these legislative changes is discussed in turn.

1. Prepaid funeral contracts

Prepaid funeral contracts must be guaranteed on or after July 1 2012. Prior to July 1 2012, Funeral homes had the option to guarantee or not guarantee the goods and services outlined in a prepaid funeral contract.

With a non-guaranteed contract signed before July 1 2012, your legal representative may have to pay more money to cover the increase in costs over time.  For example if the value of the trust or insurance contract is $8000.00 at the time these services are needed and the current value of the same goods and services is $9000.00, your legal representative will pay the funeral service provider $1000.00.

In the same scenario as above, if the prepaid contract was guaranteed, then the funeral services provider would have to absorb the $1000.00 shortfall in the prepaid guaranteed contract signed before July 1 2012.

Effective July 1 2012, all prepaid funeral services contracts must guarantee the goods and services selected.  This is one of the major reasons why people elect to prepay their eventual funeral services and supplies, as historically we know that the cost of funeral goods and services increases over time.

The funds held in a prepaid guaranteed funeral contract may be held in trust or an insurance policy.  These funds are earning tax exempt interest, and at the time of death and the funeral is provided, the money held in a trust account or an insurance policy is used to pay for the funeral services and supplies as set out in the prepaid funeral contract.

It is important to remember that the funeral services and supplies are guaranteed.  However the applicable Federal or Provincial taxes at the time the funeral services and supplies are provided, are not guaranteed.

What happens if there is money left over after the funeral has been provided?

Prepaid funeral contracts entered into on or after June 1 1990, any extra money left in the trust account or insurance policy must be paid back to the estate of the deceased.

2. Prepayment to Funeral home

A Funeral home may not accept prepayment for cemetery related services in prepaid guaranteed funeral service and supplies contracts entered into on or after July 1, 2012.  For example funeral homes will no longer be able to include the cost of cremation, cemetery opening and closing costs for earth burial, burial of cremated remains, or entombment of a casket or urn, nor scattering fees for cremated remains.  If an individual wishes to secure these options, they must be contracted through a cemetery.

3.   Administration fee

The administration fee has increased from $200.00 to $350.00.  If an individual wishes to make any changes to their prepaid funeral service and supplies contract, the funeral home may charge 10% of the value of the contract up to a maximum of $350.00.

This does not apply to the cancellation charges.  Cancellation charges will vary depending on whether the prepaid guaranteed funeral services and supplies funds are placed in a trust account or insurance policy.  It is very important to ask your licensed funeral director the difference between administration fees and cancellation fees.

If you would like more information concerning the Funeral, Burial and Cremation Service Act 2002 and its regulations please click here or if you would like more information concerning funeral homes, funeral directors and transfer services, please contact the Ontario Board of Funeral Services or email info@funeralboard.com. Toll free and local dialing are: 1-800-387-4458, 416-979-5450

I would love your feedback. And don’t forget to leave a link back to your own blog via the commentluv feature here on the site.

Until next time,

Kat

 

4 replies
  1. Faye Bonini says:

    Thank you for your information about prepaid funerals in Canada. I have looked at the Ontario regulations, and I cannot find any information about requiring prepaid contracts to be guaranteed. Can you please direct me to the correct regulation and section? Thanks.

    Reply
    • Kat says:

      Thank you for your inquiry. Section 38 of the Funeral Burial and Cremation Services Act 2002 concerns the contract price and the guarantee of pricing details are outlined in 38 c. Sched. D, s. 23. I hope this assists you. Kind regards. Kat

      Reply
  2. Ali says:

    Hi there!

    Under 1. Prepaid funeral contracts, to whom does “Your legal representative” refer?

    I am beginning to study funeral services and we are beginning with The Act.

    Thanks!

    Ali

    Reply
    • Kat says:

      HI Ali thank you for you insightful question and it is a big issue. It will be very important for you to Read the Funeral Burial and Cremation Services Act.
      One’s Legal Representative refers to the person who is eligible to enter into a prepaid funeral contract, this could be:
      1. A person with sound mental capacity entering into a contract for themselves and is over the age of 18 years
      2. A person who has Power of Attorney for Property entering into a contract for another individual who is not of mental capacity. The usual scenario here is one spouse or adult child entering into a prepaid funeral contract for a spouse/parent who has Alzheimers or Dementia

      I hope that helps you out – great question and good luck with your studies. This is a fascinating profession 🙂

      Reply

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