Pre-Need Planning and Perpetual Care Services

On this episode of Bank Chats, Drew and Jeff talk with Tim Walters, Senior Vice President and Director of Perpetual Care Services, about the money, contracts, and real-world choices behind funeral planning, including why so many families feel lost when decisions happen fast. We also push past the discomfort and spell out how a clear plan can reduce grief-driven stress while protecting your loved ones from surprise costs. 

Please like and subscribe to our show so that you never miss an episode.

Resources:
Funeral Rule

Credits:
An AmeriServ Financial, Inc. Production
Music by SchneckMind
Hosted by Drew Thomas and Jeff Matevish

Thanks for listening! You can find out more about AmeriServ by visiting ameriserv.com. You can also find us on Facebook, Instagram, and Twitter.

DISCLAIMER
This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts, with the goal of helping to take some of the mystery out of financial and related topics; as learning about financial products and services can help you make more informed financial decisions. Please keep in mind that the information contained within this podcast, and any resources available for download from our website or other resources relating to Bank Chats is not intended, and should not be understood or interpreted to be, financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants, or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation. AmeriServ Presents: Bank Chats is produced and distributed by AmeriServ Financial, Incorporated. 

Transcript

Drew Thomas: 0:04

Fast fact, a 2022 Federal Trade Commission report found that over 60% of funeral homes provide little to no pricing information on their websites. But a traditional funeral typically costs between$7,000 and $10,000. I'm Drew Thomas, and this is Bank Chats. So, we're going to talk about, we're going to talk about something a little bit different, I think, today, than what we typically do.

Jeff Matevish: 1:04

Yeah, something we haven't even breached the topic of yet.

Drew Thomas: 1:10

We typically talk a lot about banking products and services and stuff. And when we think of banking, when most people think of banking products, I think they typically think of things like checking accounts, yeah, savings account, right, CDs and things like that, right, right? But you don't always think about some of the stuff we're going to talk about today. And let me ask you this, like, this is, this, is, this can be a bit of a touchy subject. So, have you ever dealt with, like, the end-of-life sort of thing, like funerals, like, when's, I mean, have you had anybody?

Jeff Matevish: 1:39

I have not yet. No, no, yeah. So, yeah, both of my parents are still alive, so luckily, you know, I haven't had to deal with that. And anyone that's passed away in our family, they've dealt with but my parents are getting older, so you know, I'm eventually going to have to deal with that. I, I kind of grew up around a lot of death, too. I had family members there in the funeral business, and...

Drew Thomas: 2:00

That's right, yeah, right, yeah. So, you, so, that's, you probably, kind of...

Jeff Matevish: 2:03

I grew up in a funeral home, pretty much.

Drew Thomas: 2:06

But it's really kind of not a thing. Well, yeah, yeah, not this kind of stuff. It's like me growing up, you know, with my dad, like, fixing cars. Like, to me, it's, it's just a place you hang out, right? It's not the, you know, the, to some people, the mechanic is a scary place, right?

Jeff Matevish: 2:20

Funeral parlor, it was, you know, my playground, you know, yeah, yeah.

Drew Thomas: 2:24

No, totally. So, so with us today we have, we have a special guest who is going to sort of walk us through some of this stuff. His name is Tim Walters, right? Hi, Tim. How are you doing Tim?

Tim Walters: 2:34

Hi, good.

Drew Thomas: 2:35

And so, Tim, tell us a little bit about what you do and your background, so that we can get an idea of why we're, why we're, why we're inviting you to talk about death.

Tim Walters: 2:44

Okay, yeah, that's fine. I run the Perpetual Care Services division of our trust company, our trust department here at AmeriServ. And the perpetual care area has about 200 cemetery and funeral home trusts throughout about four states in the country, and it's a little bit of a niche business that we have developed in the trust company, and it's basically the death care industry. And we're talking to funeral homes and cemeteries and investing their money, taking their money and trust, and then investing that money in several different ways. There's, you know, cemeteries can do permanent lot care trust that they have to, by statute, put so much money away every year from the lot sales, and then on a funeral home side, if you go pre-need, which I think we're going to talk about, yeah, if you, if you go pre-plan at a funeral home or a cemetery, those monies, usually by statute, have to be invested in a trust or an insurance product or something. So, okay, I think that's what we wanted to talk about today.

Drew Thomas: 4:05

Yeah, yeah. So, when, when we talk about pre-need, I think that, well, first of all, let me, let's, let's start with this. Nobody wants to talk about this stuff, right? No, I mean, that's, that's...

Tim Walters: 4:15

It is taboo for most people, and it is something unfortunately that you have to talk about. And I'll give you anecdotally just to start the conversation, in 2008 I lost both of my parents 22 days apart. And I know that's a bad way to start a no, no, I mean, podcast, but I'm standing there trying to pick up the pieces, thinking, okay, what do I do here? Do we cremate them? Do we bury them? What kind of service did they want? Did they want flowers? Did they want this? Did they want that? So, kind of a deer in the headlights situation. Sure. And in a situation like that, we were, where most people are pulling their hair out in a very, very bad time with one, I dealt with two. And, you know, for the rest of my life, I wonder, did I do the right thing? Because we didn't talk about this stuff. I mean, everybody wants to think that they are invincible and they're going to live forever, but unfortunately, sometime it catches up with us, and in their case, it was 22 days apart. So, it's a little pronounced, given what most people deal with. But for me, at that time, I wasn't involved in our trust company, but it is, it became evident when I started working with them that, you know, any kind of financial plan at all should include some discussion between loved ones about what people's intentions are, sure.

Jeff Matevish: 5:42

So, yeah, funeral homes, they, they, luckily, you know, walk you through the process, but that's still a lot of decisions to make. It is, you know, at a bad, vulnerable time.

Tim Walters: 5:51

Yeah, when you're heartbroken, right? And that is not a good time to be making decisions for any of us.

Drew Thomas: 5:56

So, yeah, I've been, you know, we, my wife and I, we basically just went through a lot of this last year with her parents. Her parents died, essentially six months apart. And thankfully, her dad had done a lot of this stuff ahead of time. He had, you know, a burial reserve, he, for himself, for her mom. And some of this stuff was, you know, discussed with the funeral home ahead of time, and he had already chosen a headstone, and all that kind of stuff. And, you know, I can only imagine, you know, like you said, like when you're in that kind of a state and you're, you're grieving the loss of your loved one and so forth, the last thing that you're trying to think about at that point is whether or not they want to have an angel or a cross or something on their, on their heads, down right? That's not the, that's not the first thing on your, on your mind, yeah.

Tim Walters: 6:48

And pre-planning takes a lot of that away. It makes people, it gives people kind of an outline, the heartbroken basically they're losing their loved one, what to do. And in some cases too, it relieves a lot of that, if somebody's prepaying upfront, it relieves a lot of that financial stress. Because we hear about that all the time, where folks will pass away unexpectedly, and the family has to pick up the financial side, which can be expensive. In the state of Pennsylvania, well, nationally, right now, the, the, the average funeral is about $10,000 now, you know, if you do direct cremation, you can do, do it for a lot less than that. You know, obviously you can do a very scaled down funeral for less than 10, or you can do a lot more than $10,000. We see bills coming in all the time from our trust that, that, that range anywhere from $5,000 to $25,000. That's a lot of money for people to come out of, out of pocket, sure, when you least expect it. So, that will help. That helps as well when you can do like a pre-plan, but also prepay it, which a lot of people do. I think 65, I think I have a statistic here, 65% of the people will do some type of prepayment along with pre-plan. You don't always have to just pre-plan your final affairs and pay them at the same time. You can preplan them and pay them later. There's, there's multitudes of ways you can, you can do this.

Jeff Matevish: 8:33

So, you can do payment plans essentially.

Tim Walters: 8:35

You can do payment plans, you can pay up front, yeah. Some people will put it in a trust, which we manage. A lot of people, a lot of funeral directors use prepaid insurance, different products than what we do on the trust side, but essentially the same thing, you're setting money aside in a prepaid insurance policy, basically to cover those costs. The second part of that is, you know, you sit down with the funeral director or the cemeterian and you say to them, this is what I want. I want, I want this casket, I want this urn, I want these flowers, I want this service. And it takes all that guess work away from people. And you know, to your point, you can even do it, like I said, in a cemetery. You can pre, pre, you know, pre-plan your, your, your vault, your headstones, all that stuff.

Drew Thomas: 9:34

So, when someone, when someone does a sort of a pre-planning like that, or pays ahead, and you say they don't always have to, but say, you, say, you, you decide, okay, well, I'm going to, I'm going to meet with the funeral director, I'm going to pre-plan all this stuff. I'm going to pick out all the things that I want. I'm going to pay for it. What happens if, for example, you live another 10 years? Like, does, does the cost, is the cost fixed? Like once you've paid for it, is it, is that now, like there's no additional cost for the family later? Or is putting it into something like a trust a way to sort of ensure that even if things go up in terms of price, that it's still covered? Is that...

Tim Walters: 10:14

It all depends upon the contract, and if the contract is guaranteeing prices at today's values, then you are completely insulated from inflation. But with inflation being the way it's been the last 20 years, or whatever, a lot of funeral directors will put some type of an inflation adjustment in their in their contract. So, maybe it might not be exactly what you ordered to, today, 10 years from now, but it will depend upon the contract. Some of them still guarantee, it would just depend upon how they're writing their contracts. And both are legal. You can do both. You don't have to necessarily. It's all in what's, what's, what's written.

Drew Thomas: 11:00

So, is it, is it something where the, the person that is planning either for themselves or their loved one, puts that money aside, and then, do they, does the account in their name? Or do they give it to the funeral director and then the funeral director puts that money aside? Do they, does the funeral director like, contract with somebody, like, like, like, a trust company to, like, manage that. Or how does, how does that work?

Tim Walters: 11:25

We are the person or the people that manage the trust. So, funeral home has a trust. Okay? It's a pre-need trust. When an individual comes into the funeral home and they do a pre-plan, they have a contract. And let's just say that's $10,000 and it has various amounts or various things that they're purchasing in that contract, they will then send that money to us, and it's put in an irrevocable trust. And within that trust, AmeriServ then turns around and in accordance with the funeral director's investment objectives, and invest the money in accordance with how the funeral director wants the money to be invested. And typically, they want some equity exposure and some fixed income exposure. The equity exposure is to keep up with inflation, because the markets tend to, if you remember that statistic that's always thrown about anywhere from 8% to 12% over time, is what the equity markets will return over time. So, you have a better shot if there's equities in a portfolio to keeping up with that inflation as well. But we then are the people that manage that money, manage it, and we also keep track of the participants' prorated share of that so there's activity over time, there's, there's income, many, many different pluses and minuses that go into a person's prorated share. Hopefully it's growing over time. I mean, there have been times when the markets are not cooperating, where a person will pass away fairly quickly after and it's worth less than what it was when, when the money went in. That's a whole other subject. But you're hoping, by the money going into the trust that it's going to grow over time in there, but the participants, that money then becomes the participants' share in the trust, and the trust is actually the funeral home's for benefit of that participant, basically. When they cut the check to the funeral home or the insurance company or whatever it's, the trust actually owns the funds at that point. People get that a little confusing, sometimes. They look at it and say, well, wait a minute, I put that money in. It's my money. Once it goes into the trust, it's, it's, it's, it's a trust own asset for benefit from, for, for those, those individual people. I hope I'm not being too...

Jeff Matevish: 14:05

No, no, so the trust, if, if the, the money that was invested earns significantly more than what was, what was needed to pay off the funeral, than the funeral director, or the funeral home reaps the benefit of that.

Tim Walters: 14:21

Depends upon how the contract is written. So, a lot of funeral directors do give the family the money back, okay, depending upon how the contract is written. And then certain state laws also dictate what the surplus can, what can happen of the surplus. So, those are, it's a hard question to answer. You have to look at state law, and you have to look at the, at the contracts itself. But by and large, you're hoping that what you've put aside is going to outpace, outpace inflation. Sure. If you're going to be around for some period of time, God willing, for all of us, that, you know, that statistic I used, that 8%, so hopefully you're going to get to a point where the funds that have been put away are exceeding what, what the current cost of those, those goods are, goods and services are.

Drew Thomas: 15:13

So, it's not really a requirement, per se, that a funeral director use a trust like that. They could, but they could also just put that money into an account of some sort and then just sort of say, hey, you know, this is how much you gave me. You know, if it costs more when, whenever the time comes, then you might have to make up the difference. Or I might just be okay with, hey, you know, I might have to make up the difference, that sort of thing.

Tim Walters: 15:37

Pennsylvania state law does require it to be put into a trust.

Drew Thomas: 15:41

Oh, okay.

Tim Walters: 15:42

So, or an insurance policy. Insurance is a, is something that's acceptable as well. They, they won't allow you to just take that money and stick it in the, in the funeral home's general fund. It has to be segregated in, in some, some kind of a trust product that's segregated from the general money of the business. So, but we do generally see if a person has pre-planned and then prepaid that if the money's in there for a while, and it's hard to say what that rule of thumb is, but sometimes that would depend upon the economy and the markets and how that that's all working too. But generally speaking, you don't get it. You, if it's in there for, for a decent period of time, it's, it's going to exceed what was originally put in there. That's why you're doing this, basically.

Jeff Matevish: 16:44

So, you'd said that this goes into an irrevocable trust. What if you ended up moving?

Tim Walters: 16:49

Good point.

Jeff Matevish: 16:50

Does that money follow you?

Tim Walters: 16:53

Most states allow for at least the deposit, the original deposit, to go with you. Okay, no questions asked. And that is what I've seen in the States we're involved in. And think about it, we're in a very, very ambulatory society. People move around.

Drew Thomas: 17:13

Sure, yeah, oh, yeah, 100%.

Tim Walters: 17:15

People retire down south, much more than they do here. And if they say, put money in a pre-need fund up here, then decided they were going to move to South Carolina or Florida, they want to be able to make sure that they have that access to that money. So, most state laws do allow for, for that money to, to follow you however you go. That's a very good point.

Drew Thomas: 17:39

So, there's, so there's definitely a difference between me opening up an account and putting something in, because you can have an individual account that is, that is like an untouchable account that is specifically for funerals, correct?

Tim Walters: 17:51

You can do a burial on the bank side. You can do a burial reserve account. It's like a CD. It's an irrevocable burial CD that you set aside, and then that money is accessible whenever you pass, basically to pay those, those expenses. And some funeral directors do use that as their, their only or one of, one of them, one of the ways of, of funding, pre-need, or having people fund pre-need. Okay. Now there's two different ways, and we talked about this pre-need. At-need is when we talked about, unfortunately, people walk in after a tragedy, or after somebody passes and say, you know, we need to put all this together, and somebody's writing a check for it, that's called at-need. Okay, what we're doing is the opposite. What we're telling people to do is don't do it at-need, you know, try to, try to get people's intentions up front, determine what they want, and because everybody's different, like, I'm running this area, and I'll be honest with you, and probably all my funeral directors would kill me for saying this, but I don't want anything. I want my, I want somebody to spread my ashes off of the Atlantic Ocean somewhere. Yeah, of course, it costs some, some money to get, to get there.

Drew Thomas: 19:11

Yeah, yeah. But and to get per, permission to do it, yes, you know. And whatever but yeah.

Tim Walters: 19:16

No offense to any of my funeral directors are listening, we all have different thoughts on how we want, want our final affairs to be, be taken. But how do we know if you don't talk about it? That's the most important part of this whole conversation, is people talking about it, making sure that, that their, their family members know. And it's not, you're never too old or too young to do it.

Drew Thomas: 19:42

So, yeah, I mean, I, sadly, I agree with that. I mean, we all have, we all, I woke up this morning and I have plans for the day, you know? I mean, I fully expect to finish this conversation. I fully expect to go home and make dinner and, you know, watch TV and go to bed, and wake up tomorrow morning and wash, rinse, repeat, you know, but that doesn't necessarily mean that that's what's in the cards for me, despite my age. I mean, I, you know, I'm not really all that old. And, you know, there are a lot of people I think that they just feel like, if they kick the can down the road long enough, they won't have to ever deal with it. But then you got to think about your family and the people that you're leaving behind, because they do have to deal with it right.

Tim Walters: 20:27

That's the most traumatic thing, I think, if you talk to funeral directors and just my own personal experience, that was a very traumatic time, and then to have the extra stress involved with having to figure out whether or not I think I'm doing the right thing. Because, like I said, we didn't talk about it. Never talked about this at all. And you know, my folks were extremely vibrant till the, till the time that they passed 22 days apart. Yeah, and that's probably why, maybe we didn't talk about it. But maybe that's an important lesson too. Just because you're vibrant and healthy, doesn't mean you shouldn't talk about this, because you never know. Yeah. Never know Yeah.

Drew Thomas: 21:06

And I would say that too, as difficult as the conversation is, having these conversations while everybody is calm and somewhat rational is probably a benefit too, because you know, you, to your point about, you know, you don't know, you didn't know, necessarily, what your parents wanted. Like, you know, there are people that feel like, well, if I don't know what my mom, my mom would want, I'm just going to throw everything at it. I'm going to, I'm going to spend $30,000 and I'm going to do this big thing. And in reality, if I would have talked to her, she might have just said she wanted something simple, you know. But you feel obligated in the moment, because you're feeling grief at the loss of your parent, and you want what's the best, right? You know. So, you know, having a rational, calm conversation ahead of time might be, might be the way to go, as opposed to just making those decisions emotionally, you know, you know.

Tim Walters: 22:00

And then there's a whole other discussion these days. You know, the death care industry, we didn't even mention it earlier, burial versus cremation. Basically, cremation has basically almost taken over the death care industry. Really? Yes, there, I think the statistics I have here is last year in 2025 cremation nationwide exceeded 63%, wow, of all, all end-of-life affairs. So, in the state of Pennsylvania, we are above 56% now in 2026.

Drew Thomas: 22:38

Wonder why that is? I mean, it's cheaper. It's yeah, I guess it is. So, I mean.

Tim Walters: 22:44

Statistics here that show that, that, you know, you can do direct cremation as little as $795, and, you know, up to like $3,500, you know, versus like $10,000. Now, if you cremate, but do all the other services that might get you to that $10,000. Think about what you're taking or what you're you know, what your costs are there.

Jeff Matevish: 23:06

Yeah, you're not buying a plot. You're not buying a casket. I live, I live down the street from a, from a crematory. That thing always, always on, yeah, so, you know, I can believe it.

Tim Walters: 23:16

And yeah, projecting that, that by 2033 the nationwide level of cremation will be 70%. Wow. Versus, and you know, for the longest time, cremation crept up little by little, but once societal norms changed and thought process, there was a, there was a lot of ethnic and religious thoughts about cremation versus traditional burial, some of those have been dispelled. People feel differently about it now, and unfortunately, you hate to say it, but the economics of it sometimes are, are forcing people's hands here as well, especially, especially if the queasiness around on the whole subject or not the, you know, ethnic or religious societal norms have changed a little bit on it. People might elect for something more, you know, economical, but is, it has really changed the business. It's changed the business for funeral directors and for cemeteries, they're finding they have to, the ones that are cutting-edge are doing very different kind of niche projects. A lot of cemeteries in the area are putting in like columbarium and niches and things that you can put an urn in, rather than traditional burial, just to basically stay, or stay relevant, and to continue to participate with their clients, on this, you know, on this, with a situation of cremation increasing so much. Yeah, it's like anything. You know, the only constant in life is change. For that business has changed quite a bit, but they're doing a good job of finding ways to still serve the customer.

Drew Thomas: 25:14

I was actually going to say that because one of the things that I was sort of taken aback, I don't want to say taken aback, but it's something you just don't think about. Like there are things about this that because it's not easily discussed or often discussed, I guess maybe is what is a better term that you don't always think about, and I kind of liken it, in the weird way, to the first time you move out of your parents' house and you don't realize all the things that you need that you just sort of, that you just sort of took for granted while they were there, you know, like when you move out and you have to go to the store and you have to buy a plunger, right? Like nobody thinks about needing that, like you think you need to, you know, I need a couch and I need a TV, but, you know, all of a sudden you need a plunger, you know, or something. But I was, I was sort of surprised by the idea that, like, you literally have to buy a plot of land, like, if you're, if you're going to be buried. That, that plot of land belongs to you, like, it's the last 33 feet, square feet of land you're going to own, you know.

Tim Walters: 26:15

You'll get a deed in most cases, and you know that, that deed will then belong to you for, you know, in perpetuity. It's not like Europe, where they sell it for, what is it 40 years or something, and then that's a whole other subject.

Drew and Jeff: 26:28

Oh, yeah. Oh, really, do they do that?

Tim Walters: 26:30

Well, it's because of the lack of property over there. Okay, sometimes they bury them three deep, and, you know, one on top of the other because they're running on land to do this in.

Drew Thomas: 26:42

Maybe, I mean, that's in, yeah, insane. I mean, that probably doesn't necessarily apply too much to the United States right now, but that might be why you're seeing cremation rise in some of the other areas. Because they don't could be like, where are you going to where you're going to put everybody? You know, our population is larger than it's ever been, and that means that, you know, that is going to roll over is until population starts to decline, but there's always going to have to be room for somebody.

Tim Walters: 27:06

It was interesting. I was reading a study today in preparation of this, and there was a study that I saw by one of the insurance companies, and they had gone out and looked at all of the states, and there was a kind of a state by state, region by region, results. And the one thing that I took home from that was that out in the west, clear out west, cremation is over 80% in some of those states out west. I can't remember exactly which ones they are, but they're the ones on the Pacific. Yeah, and, but I'm wondering if that isn't what you're, you know, a direct result of things are a lot more dense in some of those areas, properties a lot more expensive.

Jeff Matevish: 27:53

So, there's locations where, you know, it's just the environment that's not conducive to burials too. You have, you know, places with high ground water there, you see more mausoleums than anything.

Drew Thomas: 28:05

Yeah, yeah, yeah, you're right. I mean, you go down to Louisiana or Baton Rouge or something like that, it's going to be different than it is around here. And even in Pennsylvania, there are certain rules that there has to be a, there has to be a vault, and you can't just put the, the casket directly in the ground like to be in like a...

Tim Walters: 28:21

That's changing a little bit too, because there are some natural burials that are taking place now. Certain places are doing natural burials, where they, they're doing certain things with, with natural, I don't know, the whole process, but.

Jeff Matevish: 28:39

Without embalming and with all that, yeah, right, right. So, giving back to nature type thing, yeah, right, yeah.

Tim Walters: 28:45

I know one of the local cemeteries is doing that. They have an area that is dedicated to natural burials now. So, I think people are starting to, you know, look at some, some other ways of doing this as well. But you had mentioned buying a plot of land, that's the other thing that we manage. And I mean, this wouldn't really have anything to do with our clients, but cemeteries, by statute, need to, if they sell a plot of land for somebody's burial, or a mausoleum crypt or something, they have to put a certain percentage of that away, depending upon what state it is, the percentage would be different. But, and they put that money away in perpetuity, meaning forever in the trust. And the trust lasts forever, because, and think about it, if you're, you going to be buried somewhere, I mean, I don't know, as if I care, 200 years from now, but somebody's probably thinking that they want the cemetery to be well taken care of as time goes on. Sure, so those funds stay in there. The principal stays in there forever, and the only thing they can draw out for the maintenance of the, of the cemetery is the, the income over time. They can take principle out if they get a court order, say, a tornado comes through or something, and courts say they can do that, but typically, that's what it takes. But, but we manage those trusts as well. And I think that, that would be something to consider, is, if you're, you know, you're still planning on traditional burial, you want to make sure that whatever cemetery that you're, you're, that you're thinking about is, is being well maintained, and not only well maintained, but that they're putting the monies aside, and their, their licenses are up-to-date because they are licensed by the real estate commission. Most for-profit cemeteries are so you can get that information in the state website very easily. Same with them, with a funeral director, you can look and see if their, if their funeral license is up to date.

Drew Thomas: 30:47

So, so that was one of the other questions I was going to ask. Because after, after Jeff said about what happens if you move, I was going to say, what happens if the funeral, the funeral home, goes out of business? Or the funeral director retires, or something like that, and just, you know, doesn't do that anymore, like and yet you're still here, and you made arrangements with them, what happens then?

Tim Walters: 31:08

Well, we have some situations like that where funeral homes have gone out of business. Maybe the proprietor wanted their kids to take it over, the kids saying, I'm not doing that. I'm going to be a doctor or whatever. So, sure they, they work the funeral home until they can't.

Drew Thomas: 31:26

I want to work, I want to work on the life side, yeah, work on the life side.

Tim Walters: 31:31

I didn't do that intentionally. It worked. I do think that those, you know, those situation exists. I know personally they exist, and that's one of the nice things about the money being in trust, is we hold on to that money until such time as that, that person is, is or the estate needs that money. So, unfortunately, we do have some trusts where the funeral home no longer exists, but the participants are still in our trust. And you know, once they pass, that money can be used for another, at another funeral home. There are times when that money is assigned to another funeral home, depending upon the size of the trust and a number of factors. That's the good thing about having the money and trust. And you know, it's not like they can go out of business and take the remainder of the trust money and go somewhere and, you know, live in the warm, that money stays in the trust until such time that those, those that person needs it, has away.

Jeff Matevish: 32:35

Basically, it's, it's as if you had moved right, right? Yeah.

Drew Thomas: 32:39

So, so and one of the other things, one of the other terms that you mentioned earlier, that I wanted to touch on, just to make sure that people understand the difference, you mentioned, revocable and irrevocable. So, at what point can you create, like, what kind of account can you say, well, I'm going to put this away for my funeral, but then I'm, I changed my mind, I'm going to take it back versus ones that, you know, what's the advantage of having that versus one that once you put the money in there, it's in there forever?

Tim Walters: 33:05

Most of the, I don't know in what context I used revocable versus non-revocable, but most of the state laws require it to be non-revocable, because they want that money there. And they want people to have the peace of mind of knowing the money's there and it's going to be there, you know, until they need it, if they're, if they're putting it in at 60 and they live to 110 you know, God willing, that they, that they the money is there. Basically, there are certain irrevocable trusts, but the revoked, or, I'm sorry, revocable trusts but the irrevocable are going to be much more common.

Drew Thomas: 33:47

It does that also protect the money from something like, for example, if you had to go into like a nursing home or something like that, like, you know, whenever they look at your assets as you enter that?

Tim Walters: 33:59

Pre-planning is something that there is a, there is a tool that they, they use that it for Medicare. It's a medic, Medicare putting certain of your assets aside to pre-plan for your final expenses. It's a way of managing assets for Medicaid. Okay, so people do, do that as a planning, planning aspect of their, of their whole financial plan.

Drew Thomas: 34:28

So, because, I mean, I would think that would almost be also part of the conversation that people should be having is, you know what, you know, as, as you age, like, okay, well, what are you willing to and sometimes, I guess, you don't have a choice if you have some sort of like a, some sort of like a mental issue, if you develop some sort of dementia or something, or maybe, maybe your spouse passes before you do, and you don't have family nearby. But those are kinds of the questions.

Tim Walters: 34:52

That too requires them to be irrevocable, though, so when you put that money aside, you can't go back in later and decide that you want it back, they're going to require to be irrevocable. And then, typically, we have to send them as trustee a letter stating that they, that it's irrevocable. And then they will then turn that on to Medicaid for whatever purposes they need to, to get their Medicaid.

Jeff Matevish: 35:19

Probably helps too, you know, if your spouse maybe does not have the same wishes as you did, it kind of ensures that you get to go out how you wanted to go out. Yeah.

Tim Walters: 35:29

And then there's the whole aspect of all of this. And I love to hear some of the attorneys talk. We go to seminars that, you know, life is changing too, the whole cremation thing versus burial, first marriages, second marriages, third marriages. Like, you know, maybe you want, that's true, a traditional burial, but, you know, a second wife really wants to have you cremated, but you have pre-planning, you know, for this and like, who gets on the headstone? There's all these things that like have not kept up with their lives, not kept them within life, multiple marriages, multiple families, you know, the Brady Bunch, okay, the one side of the family may want, what the, so there's a lot of cutting-edge law associated with this, this. And the other big thing is you don't have to bury remains that are cremated, and that's a big issue right now. I mean, attorneys deal with it every day that folks will be cleaning out mom and dad's coat cupboard, and they'll find, you know, three urns up there that was grandma, grandpa and great grandma. What do you do with all of those? You know, no, yeah, how do you deal with that? What is the legal way of doing? That's a whole other subject. But yeah, there's a lot of things to consider is with all of this. Certainly letting people know what your intent is, is a large part of this whole thing.

Drew Thomas: 37:00

And so as part of letting them know what your intent is like, based on that, I'm sure that the answer to this question is going to be different. But what are some things that most people should definitely cover when it comes to pre-need? Beyond, beyond, like, I guess, the...

Tim Walters: 37:19

Well, the funeral director...

Jeff Matevish: 37:20

Flower arrangement versus, something more serious, yeah.

Tim Walters: 37:24

That can cause problems for families too. I mean, I've heard stories of people fighting over whether we're going to do carnations or roses kind of thing, so.

Drew Thomas: 37:32

You would think, you would think that there would be so many other problems to try to work out there. But, yeah,

Tim Walters: 37:35

It's emotion. I had a very good friend years ago, you're right. I mean, it's, you know. and this is a really off topic, that was, he worked for Bank of America's, either Bank of America or Wells Fargo's private bank. And he said the two things that people fight over in estates are the Lionel train set and the lake house.

Drew Thomas: 38:05

So, yeah, it makes sense, yeah.

Tim Walters: 38:06

Mom loved roses, but dad loved carnations. That could create an issue. So, sure take it off the table, put it down what you're going to be doing, yeah, that's, that is a minor thing. Obviously, there you want to, you want to let your, your family know, do I want to be cremated? Do I want to have a traditional burial? Okay, if I'm going to, and funeral directors do a wonderful job of helping you out with this. They'll take you through. You can pick a casket, you can pick this, you can pick that, you can pick what kind of service you want. You can even pick what kind of wake you want afterwards. You know, there's a number of things, whether you want a hearse, whether you don't, whether you want a graveside service or not. All that stuff can be pre-planned up front, and that takes all the wish or wish work, but the, the legwork, the mystery out of it for the family, and by doing that up front.

Jeff Matevish: 39:02

Yeah, I'm sure that conversation for pre-need is a lot different than the, what did you say? The whenever you need service right now?

Drew Thomas: 39:10

At-need, at need that, yeah.

Tim Walters: 39:12

People walk in and they, and I've been in quite a bit to visit our clients for one reason or another, and they, you see the people walking through the door, deer in a headlights, you know, past unexpectedly last night, what did she want kind of thing? So, take that away. You know, take that away from your family. It's a, it's a stress that if you love your family, you're not going to want them to go through kind of thing. Sure that away. And maybe this is just general advice. It's not, it's not financial advice, but there is a piece of financial advice here. If you could, you could get a contract that's guaranteed, and, you know, in an economy that has true inflation, then why would you not want to? Yeah, lock in prices now to insulate your family from having to write a check after you've

Drew Thomas: 40:02

Sure, sure. Yeah, no, totally get it, though, you know. So, let's, let's, I want to be, I want to also still mention a little bit about some of the things we started. We sort of started on a path, and we kind of came back about perpetual care and the cemeteries. So, obviously, I think that most families, they, they sort of have this especially, I think if you're a grandson or granddaughter or something, and you're going to see great grandpa at the cemetery, and you're learning about your family history, but you didn't really know them or anything. You're not actively involved in maintaining that, that area, if they were buried, for example, but you said that cemeteries are obligated as part of their charter. I guess if you want to call it to maintain the grounds and stuff, right?

Tim Walters: 40:50

It's their, through their trust agreement, basically they have to do, they have to set aside a certain amount of money, and the trust continues to grow, and that money then is invested, and the interest earnings and dividends and monies that are, that come off of that are what is then sent back to the cemetery to cut the grass, to trim around the headstones. Now there are cemeteries that have flower funds too fewer and far between these days, but some cemeteries will offer you a flower fund where you can go in and donate money up front, so there's money for flowers put on your grave every Memorial Day or certain times during the year. They have kind of gotten away from that, but there are some cemeteries that still do have that type of thing, if you're, if you're worried that there's flowers on your grave every, every year.

Jeff Matevish: 41:48

Now, what kind of things are not covered by that?

Tim Walters: 41:51

Well, I mean, basically the perpetual care, permanent lot care is for the care of the cemetery.

Jeff Matevish: 41:59

Not, not the plot itself.

Tim Walters: 42:01

Yeah, because typically they will come around with the lawn mowers and the weed whackers and stuff and take care of it and keep things maintained. But you're not now, if you have a family mausoleum or something like that, that's a different story. There's a lot more work involved in maintaining that. And typically those are set up under, you know, their own individual trust. So, when you go through the cemeteries and you see these big mausoleums, usually there is a separate trust associated with that at that particular mausoleum, family mausoleum.

Drew Thomas: 42:38

So, there's, obviously, I would say there's a difference between certain cemeteries too, because depending on your faith, you may have your, your, your synagogue, your mosque, your church that may manage the cemetery. There's also public cemeteries. Are there rules around the fact that the cemetery has to pass into ownership with somebody so that those trusts will continue to be utilized and the grounds maintained.

Tim Walters: 43:10

It's a Permanent Lot Care Trust. So, if a cemetery is sold, if it's a for-profit cemetery, those funds, they'll then will transfer over to the new owner, typically, if it's a not-for-profit, that not-for-profit stays not-for-profit, but for some reason one not-for-profit would take over another. Those monies then will go to the, with the cemetery. Okay, they don't go away by virtue of some merger that occurs. Because that happens, we have some fairly acquisitive funeral directors and cemeterians that buy, buy and sell funeral homes and cemeteries all the time for profit, yeah, quite a few of them out there. But the rules relative to both are, there's slight nuances depending upon whether or not it's for-profit or not-for-profit. And then specifically, certain cemeteries that are religious based have more exemptions than the ones that are, that are for-profit.

Drew Thomas: 44:12

Yeah, I was actually thinking of that because in our town, as you know, like, we've had a number of churches over the years that have either merged, you know, like, you know that used to have enough of a congregation that, you know, they had, they were on their own independent church, and then they would merge into others, or they would, or they would, they would sort of, sort of fall out of existence. I don't want to say it that way, but I mean, but yet they have their own little private cemeteries and stuff like that. So, I didn't know, like, what happens to those you know?

Jeff Matevish: 44:41

Or what happens to a cemetery that runs out of room that you're not adding plots, you're not adding well, you're, you're not adding new monies into it?

Tim Walters: 44:49

You're hoping that the, the endowment fund, the permanent lot care, is large enough to take care of that over time, but you got to be thinking mathematics of inflation, right? There's going to be a time where that stress is going to occur. We do have cemeteries, and there are cemeteries in Pennsylvania that are stressed just by virtue of that situation. Either they were a part of something, and now whatever that is, is defunct. So, who's taking care of it falls in disrepair, you know, or situations where they have sold just about every lot and there's no, there's no more space left. So, you would hope in that situation, and the endowments are large enough, that they can take care of it in perpetuity. But there isn't always that guarantee, and it is kind of an up, that's why I said just, you know, you want to be mindful when you're burying somebody, take a good look around and make sure the place is being maintained, because in all through the country, it is a new thing, not a new thing, but I would say an emerging problem, that there's, there's cemeteries that are in disrepair, that become even more disrepaired because they don't have the monies, or for whatever reason, the governing bodies have fallen defunct, and there's nobody really taking care of it anymore. Now, the bigger ones, you don't have that problem with, the bigger for-profits and folks that are, that are that are doing it on a larger scale. I mean...

Drew Thomas: 46:22

Yeah, you're not, you, we don't have to worry about Arlington, most likely, you know, or in our, in our area, we have, how big is, how big is Grandview? Grandview is like, the third or fourth or fifth largest cemetery in the country, I think?

Tim Walters: 46:35

I don't think it's that large, but it's fairly large, big. It's a big cemetery and a very well-run cemetery, mean to put you on the spot for that, but I just mean, like, it's a big, it's a big area in there. I mean, I'll say this, if any, any of anybody is listening, from Grandview, it's one of the most attractive

Drew Thomas: 47:02

And it's, I mean, you know, one of the, one of the other things that I think is funny is my grandparents, my, my grandparents are in Grandview, but I know some people that are in other cemeteries, and one of them is Richland cemetery too. yeah, and that, that is some, I don't know, the statistics of And in both cases, it's, I don't know if it's ironic, but it's, it's interesting that the, the, the scenic views, and everything Grandview. You're, you're... from, from, from those areas, are some of the most beautiful views in all of the area. And yet, it's a cemetery. It wasn't somebody that decided to put their house up there to be able cemeteries that, that I've ever seen. It's so well taken care to see out over the valley and all the ridge tops. of.

Tim Walters: 47:40

Yes, some of it's, you know, it's up above Grand View there, that's some of the most beautiful. Oh, yeah, it's a scenic overlook that you're ever going to find up there.

Drew Thomas: 47:48

Yeah. So, I guess it's a testament to some degree that we give our loved ones, the, the best view in the house.

Jeff Matevish: 47:55

And, yeah, final resting view, yeah.

Drew Thomas: 48:00

So, I guess the, one of the other questions that I guess I have, is the money that, the money that we talked about, like with the pre-need, is there a percentage of that that goes toward these perpetual care, things, like, does the funeral director say, okay, like, I have to take so much of this and give it to the cemetery? Or, how does the cemetery get that money then?

Jeff Matevish: 48:22

They're two different things, aren't they?

Drew Thomas: 48:23

Well, that's, I'm saying yeah.

Tim Walters: 48:25

Because, I mean, when you're into a, if you walk into a funeral home and you put together a contract that you want, this, this, this, and this, the funeral director is going to hold on to that contract. They're going to turn the money over to their, I mean, the trust, or if they're using an insurance that's going to go to the insurance company. Those are two totally different things. The, when we talk about the perpetual care side, that's just predominantly money that they're, that they're setting aside for the permanent care of the cemetery, all of those monies that you're talking about for all the other purposes, casket, flowers, urns, all that stuff that's all kept at the, at the funeral home, and then used for your, whatever your final period is. And then, you know the but you can, you can pre-plan in a cemetery too. You can go to them and buy pre, pre-buy a headstone or whatever. So, I mean, you can do, you can do pre-merchandise sales on both, but, but with it, but the perpetual care has really nothing to do with the pre-need. We manage both, because our customers are both, you know, and both of them involve Trust, which is what we do.

Jeff Matevish: 49:50

So, are there different, are there different levels of perpetual care, like different I'm going to say packages, type thing?

Tim Walters: 49:57

You mean pre-need?

Jeff Matevish: 49:59

No, the perpetual care. Like, can you...

Tim Walters: 50:02

No, the cemetery, the cemetery just has to put so much aside every year, okay, into the principle of the fund, basically, and then that is invested, and those monies, then are, are used for the care of the cemetery, okay. So, that is not, that is the cemetery doing that, not the individual.

Jeff Matevish: 50:21

Right, you had mentioned the, like, the flower fund, you know, something different. Okay, I didn't know if there was, like, you know, there was a package that just took care of the lawn, and there was a package that took care of, you know, doing this and that and that, okay.

Drew Thomas: 50:31

But it's, but, but I guess what we're hearing is that what you pay to the funeral home is different than what you pay to the cemetery, but you do pay the cemetery like you so you're paying the cemetery for the land. You're paying the cemetery for the headstone, potentially you're buying, and parts of those fees go toward this, this perpetual care trust. Got you.

Tim Walters: 50:51

Let me use an example. You go up to Grandview right now, and you say, I want to buy, as you mentioned, Grandview. I want to buy a plot of land up on the hill up there. They're going to go to their, their pricing list and their, and their map, and they're going to say, okay, that's $1,000 whatever it is, I don't know. Yeah, not pricing it for them.

Drew Thomas: 51:14

Oh, no, no, we're holding you to the price now. I'm kidding.

Tim Walters: 51:17

They will then close with you, you know, sign whatever paperwork, and then they'll turn around and take 15% of that and send it to whatever bank they have a trust at, basically. And that money sits in there as principal. So, $150 bucks is going to sit in there forever, and then the it'll draw interest and dividends, depending upon how it's invested. That's the money that Grandview uses to basically cut its grass, to paint its buildings, to weed whack around stones and things.

Drew Thomas: 51:51

So, so when it so, when it comes to the parts that we as individuals can, can handle or manage. You know, should we go to our bank or our credit union and say, hey, I need help planning this out and open a CD like you said, like a, like a burial reserve, or is it better to go to your funeral home or your funeral director and sort of do the pre-need planning with them?

Tim Walters: 52:18

Going to the bank and setting up an irrevocable burial reserve, It's only getting rid of one of the question marks, the money piece. But it may be, not be getting rid of the money piece completely, because if you don't know, given what your expectations are of what you want your final days to be is it going to be enough? Is it, you know, or is there going to be a balance that has to be paid? It's the same way some people say, well, I don't need any of that, I have a life insurance policy. You have a life insurance policy, but it's not, it's not answering the second part of the question, which or what are your intentions? What do you want? Right. Basically, yes, the money may be there, but what are your intentions? And you know, any local funeral director would do a wonderful job in helping you walk through that. And they do. They have a, they have a list that they use, a contract pricing sheet that they use, and they go down the list basically, very logically, you know, and it would, it would make sense to you. Okay, we're going to, we're going to, you know, offer you this, this casket or this urn, and then, you know, this service, this, this, this, and then, and then they have it on record, and they keep it on record. You keep it on record so everybody knows what your intent is. I mean, yeah, the, the funding piece of it only takes care of, in my mind, part of it, yeah, the real anguish piece for most people are is undoubtedly, okay, what did they really want? Because we never talked about this. So, and I think that that's, that's a really important thing. I mean, we all spend our entire lives building 401k's and IRAs and trying to, that's true, that's true, but yet we don't talk about this. This is something that you really need to talk about with people and think about yourself. I mean, I know people that my personal friends, that will turn purple before they'll talk about this and you know, it's just part of life.

Drew Thomas: 54:23

Yeah, I completely agree with you. And yes, we know we are obviously a financially based podcast, and we're, you know, and I think we got a lot of good information in this conversation about how to potentially handle the financial side, but I do agree with you that the financial side is only one part, and arguably the lesser important part than just knowing what your family member or conveying what you want to your family members when it comes to this, and just trying to put aside your discomfort and really just sit down and have these conversations. And I think that's an important message.

Tim Walters: 55:02

I don't even know if we're using it anymore, but the whole financial partner for life thing, yeah, you know, there's other things that we talk to customers about. You know, in the Retirement Services area, they talk to them about their IRAs. Talk to them about their, you know, their pension investments and so on and so forth. When somebody goes into to buy a house, you know, you know, the mortgage lenders put them in, it's not all about finance. It's about trying to accomplish what you want to get out of life. And that's a part of life this, that's, that's the one thing I wanted to convey today. And I think you wanted me to convey, yes, that, yeah, that it's a part important, very important part of life that we're not really, that most people get squeamish about.

Drew Thomas: 55:45

Yeah, I think, I mean, I think you said it very well, and I think that's true of, you know, any good financial institution, their products and services and their people are really just tools or vehicles to getting you what you want out of your situation. You know, your checking account is a tool so that you can pay your bills. Your savings account is a tool so that you can maybe put some money away for a rainy day. Your retirement is for your, you know, there are tools and products involved here, but really it's not about selling you a tool or a product. It's about making sure that you have what you want out of life or beyond, and being able to help you make that happen, you know. So, we really appreciate you coming down and talking to us about this. Thank you for having the conversation, because it's...

Tim Walters: 56:38

You're going to be calling me the Grim Reaper, around here.

Drew Thomas: 56:42

Yeah. I mean, I learned a lot, I don't know. Oh, yeah, you know, this is, this is, you know, hopefully something that you know by learning more about it, it makes me want to, you know, potentially have those conversations too. Because I think sometimes, and I think that's true of a lot of banking products, people don't ask the question because they feel like they're misinformed or under informed, or they don't well, they don't know what to ask, right. Yeah, exactly. They don't know what to ask. So, if you don't know what to ask, you're just going to keep your mouth shut so you don't seem dumb. And that's not that's not...

Tim Walters: 57:12

And you know what? To a certain extent, they shouldn't feel bad about that, because before I came to the trust company to run Perpetual Care Services, I ran a small, little community bank, and I never dreamed that I would be in this business, but that one thing that happened to me in 2008 made me feel like this was something that I had to talk to people about at some point. I do, yeah, I talked to a lot of people about the importance of, you know, because I was met square head on with, okay, what do you do? And, you know, was I doing the right thing? And sometimes I still second guess, but so. Yeah, take that away. Take it away completely by doing that. So, and I'm, I learned something every day. My, my last disclosure is, I am not an expert, and if I'd said something wrong today, you know, I...

Drew Thomas: 57:59

Oh, we put that stuff on the end. We do, we do our best. But really I mean, we say it in the disclosure for all of you that don't stick around to listen to it, but we always tell people like we're one, we're one source of information. Sure you know we want you to reach out to people that you trust, that you feel are confident, you're confident in getting their advice, but we hope that we can at least help you to start that conversation, because knowing more about this stuff is, is hopefully a way to broach that subject and maybe get you to go talk to somebody that you trust about it, because you listen to us, you know so. And I'll have to say, there's some, there's a lot of really good people locally that people don't have to go far and wide. There's a lot of funeral homes and cemeteries here locally that they can talk to, yeah, about this stuff. And you know, there's a lot of your financial advisors sell pre-need insurance too. So, it's not necessarily just talking to you want to talk to them about your intentions, but if you're just interested in a financial piece, you know, certainly there's, there's between the bank products and, you know, pre-need insurance that just about any financial advisor sells, you can handle that as well. So, awesome.

Tim Walters: 59:15

Yeah. Okay. Any other questions? Jeff, you got anything?

Jeff Matevish: 59:15

I don't think so. Thank you.

Drew Thomas: 59:15

Thank you, Tim, thank you very much. Appreciate it.

Drew and Tim: 59:22

Appreciate it. All right.

Jeff Matevish: 59:32

This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts with the goal of helping to take some of the mystery out of financial and related topics, as learning about financial products and services can help you make more informed financial decisions. Please keep in mind that the information contained within this podcast and any resources available for download from our website or other resources relating to Bank Chats is not intended and should not be understood or interpreted to be financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation.

Drew Thomas: 1:00:36

In 1984 the Federal Trade Commission introduced what is known as the Funeral Rule, which states that consumers have the right to get a general price list from a funeral provider when they ask about funeral arrangements. They also have the right to choose the funeral goods and services they want, with some exceptions, and it must be made clear if state or local laws require the purchase of any particular item. More detailed information on this rule can be found by clicking the link in the description. The larger issue, as we discussed today, is that these decisions are often made quickly and under great emotional stress. What kind of funeral should it be? What funeral provider should be used? Should the body be buried, cremated, donated to science? Does the person want an expensive funeral, or would they rather distribute the bulk of their remaining assets to their family? All questions that could be answered and put in writing well ahead of time, if only we could get past the uncomfortable nature of discussing these things with our loved ones. AmeriServ Presents Bank Chats is produced and distributed by AmeriServ Financial, Incorporated. Music by SchneckMind. My everlasting gratitude goes out to my co-host and executive producer, Jeff Matevish. Please like and subscribe to our show so that you never miss an episode. For now, I'm Drew Thomas, so long.