Guaranteed and non-guaranteed are the two products sold under one name. Under a guaranteed-price contract the provider agrees to furnish the specified merchandise and services at the death, whatever they cost by then, and the family owes nothing more for those items. Under a non-guaranteed contract the money is simply set aside, with any growth applied against the bill, and the family pays the difference if prices have risen more than the fund has grown. A contract can also be guaranteed as to some items and not others, and cash advance items such as cemetery charges, obituaries and clergy honoraria are routinely outside any guarantee because the provider does not control them. The word "guaranteed" on a brochure is not the answer; the itemized list of what the guarantee covers is.
Revocable and irrevocable is a separate axis, and it is usually about Medicaid. A revocable contract can be canceled and the money recovered on the terms state law provides. An irrevocable one cannot, which is the point: an irrevocable preneed contract can convert countable assets into an exempt arrangement for a Medicaid or Supplemental Security Income applicant. Florida's statute writes both the permission and the price of it into the same paragraph: all preneed contracts are cancelable and revocable, "provided that a preneed contract does not restrict any contract purchaser who is the beneficiary of the preneed contract and who is a qualified applicant for, or a recipient of, supplemental security income, temporary cash assistance, or Medicaid from making her or his contract irrevocable," and once made irrevocable it "may not be canceled during the life or after the death of the contract purchaser or beneficiary." Any unexpended money on such a contract goes to the state's Medical Care Trust Fund after final disposition, not to the family. That is the trade, stated plainly by the statute that offers it.
Where the money sits, and why the answer is state law rather than the contract. States require preneed money to be protected, typically by depositing a portion in trust or by funding the contract with a life insurance policy assigned to the provider. Florida's rules are illustrative of what a trusting regime looks like in practice: deposits must be made within 30 days after the end of the calendar month in which payment is received, under a trust instrument with a trust company, a bank holding trust powers or a savings and loan holding trust powers; the trust agreement must be filed with and approved by the licensing authority before use; the trustee, not the licensee, invests and conserves the funds; trust funds may not be loaned to the licensee or to anyone connected with it, nor invested in any business in which such a person has an interest; and the licensee's interest in the trust may not be pledged as collateral. The percentages required to be deposited, and whether insurance funding is permitted at all, differ by state, so the protection behind a contract is a question about the state where it is signed.
What the FTC Funeral Rule does and does not do here. The rule at 16 CFR part 453 makes it an unfair or deceptive practice for a funeral provider to fail to furnish accurate itemized price information "to persons inquiring about the purchase of funerals," which reaches someone shopping in advance exactly as it reaches a family arranging after a death. So a preneed shopper is entitled to the General Price List and to buy only the items they want. But the rule contains no preneed provisions: it says nothing about trusting, guarantees, revocability, cancellation or portability. Every one of those is state law, and attributing them to the Funeral Rule is a common and consequential error.
Cancellation, default and what happens if the provider fails. These are the terms most worth reading before signing, and again they are state law. Florida gives a purchaser an unconditional right to cancel within 30 days of execution and receive a complete refund of what was paid, less any burial rights, merchandise or services already used, and requires the contract to disclose that right in conspicuous type, with the disclosure's absence not impairing the right. After 30 days the purchaser may cancel the services, facilities and cash-advance portions at any time for a full refund of the price allocable to them, with accumulated earnings going to the licensee. The merchandise portion is different: a refund is owed only where the provider cannot or does not deliver, and the provider may satisfy its obligation by subcontracting or by providing items of equal or greater quality. If the purchaser falls 90 days behind on payments the contract is in default and the licensee may cancel it, keep the trust funds allocable to merchandise as liquidated damages, and return the funds allocable to services and cash advances, after 30 days' written notice. If the provider breaches or fails to perform, the purchaser is entitled to a refund of everything paid within 30 days of a written request.
The portability problem does not have a clean fix. A preneed contract is a promise by one provider. Families move, providers are sold or close, and the goods a family wanted twenty years ago may not be what they want now. State law may permit transfer of merchandise or burial rights, as Florida does subject to the licensing authority's rules, but a guarantee negotiated with one funeral home is not automatically honored by another. Anyone weighing a preneed contract against a payable-on-death account or a life insurance policy earmarked for the purpose is trading a locked-in price for the ability to change their mind.
