How does a prepayment cremation work?

A fellow caregiver asked...

I am considering a prepayment cremation program through a company named Smart Cremation. The plus is the service is "guaranteed" at the price I pay today even if I pass years from now and there is no attempt to upsell my survivors as is often the case. They say part of the money I pay will be "trusted" to insure the service. Is that true? How do they do that?

Expert Answer

I'd be wary of a "prepaid cremation" plan. I have no knowledge of the Smart Cremation company, and make no judgment about it. But no "guarantee" now can insure that any company, including a cremation company, will remain in business years from now. Further, I do not understand the meaning of having a portion of your payment "trusted." Does this mean some of your money would be put in some kind of trust account? If so, what institution would hold the account? Who would have access to the account? Who would be trustee of the account? Would you have access to it? Would you be able to obtain information about it? Finally what percentage of your payment money would be "trusted?"

In sum, I suggest that you do considerable investigation before agreeing to this cremation program. And even if you are assured that most of your money is safely protected by being "trusted," you should take into account that any business can go broke.